A BILL TO BE ENTITLED
AN ACT to modify the current operations and capital improvements appropriations act of 2011 and for other purposes.
The General Assembly of North Carolina enacts:

PART I. Introduction and Title of Act

Introduction
SECTION 1.1.  The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and, except as allowed by the State Budget Act, or this act, the savings shall revert to the appropriate fund at the end of each fiscal year as provided in G.S. 143C‑1‑2(b).

title of act
SECTION 1.2.  This act shall be known as "The Current Operations and Capital Improvements Appropriations Act of 2012."

PART II. Current Operations and Expansion General Fund

Current Operations and Expansion/General Fund
SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, are adjusted for the fiscal year ending June 30, 2013, according to the schedule that follows. Amounts set out in brackets are reductions from General Fund appropriations for the 2012‑2013 fiscal year.

Current Operations – General Fund		2012‑2013

EDUCATION

Community Colleges System Office	$        10,000,000

Department of Public Instruction	248,112,460

University of North Carolina – Board of Governors
	Appalachian State University	(45,799)
	Elizabeth City State University	(179,657)
	Fayetteville State University	(20,364)
	NC A&T State University	(179,398)
	NC Central University	(29,232)
	NC State University
		Academic Affairs	(893,237)
	UNC‑Asheville	(46,868)
	UNC‑Chapel Hill
		Academic Affairs	(3,946,960)
	UNC‑Charlotte	(52,060)
	UNC‑Greensboro	(292,968)
	UNC‑School of the Arts	(237,985)
	UNC‑Wilmington	(130,472)
	General Administration	9,058,141
		University Institution Programs	20,773,483
	UNC Financial Aid Private Colleges	4,781,517
	UNC Hospitals	(18,000,000)
Total University of North Carolina – Board of Governors	$       10,558,141

HEALTH AND HUMAN SERVICES

Department of Health and Human Services
	Division of Central Management and Support	$         1,507,641
	Division of Aging and Adult Services	1,500,000
	Division of Services for Blind/Deaf/Hard of Hearing	(168,336)
	Division of Child Development	14,500,000
	Division of Health Service Regulation	1,792,559
	Division of Medical Assistance	130,271,016
	Division of Mental Health, Dev. Disabilities and Sub. Abuse	3,583,584
	NC Health Choice	(2,007,430)
	Division of Public Health	20,770,395
	Division of Social Services	(9,079,116)
Total Health and Human Services	$    162,670,313

NATURAL AND ECONOMIC RESOURCES

Department of Agriculture and Consumer Services	$      49,576,024

Department of Commerce
	Commerce	16,210,202
	Commerce State‑Aid	1,633,038

Department of Environment and Natural Resources	(44,868,945)

Wildlife Resources Commission	478,821

JUSTICE AND PUBLIC SAFETY

Department of Public Safety	$   (16,522,833)

Judicial Department	1,172,655

Department of Justice	(5,138,758)

GENERAL GOVERNMENT

Department of Administration	$     (1,002,667)

Department of State Auditor	(160,141)

Office of State Controller	1,580,412

Department of Cultural Resources
	Cultural Resources	502,603
	Roanoke Island Commission	(330,000)

State Board of Elections	587,037

General Assembly	2,126,136

Office of the Governor
	Office of the Governor	(84,466)
	Office of State Budget and Management	(288,912)
	OSBM – Reserve for Special Appropriations	1,609,388
	Housing Finance Agency	(4,497,877)

Department of Insurance
	Insurance	459,055
	Insurance – Volunteer Safety Workers' Compensation	1,876,346

Office of Lieutenant Governor	(4,166)

Office of Administrative Hearings	60,700

Department of Revenue	(757,866)

Department of Secretary of State	816,936

RESERVES, ADJUSTMENTS, AND DEBT SERVICE

Information Technology Fund	$          (750,000)
Job Development Investment Grants (JDIG) Reserve	(6,500,000)
State Retirement System Contributions	(62,300,000)
Continuation/Justification Review Reserve	(35,576,758)
Compensation and Performance Pay Reserve	(121,105,840)
Compensation Bonus Reserve	79,086,788
Disability Income Plan of North Carolina	(8,688,000)
Severance Expenditure Reserve	4,000,000
State Health Plan	1,000,000
Transitions to Community Living Fund	50,000,000
Eugenics Reserve Fund	11,050,000
VIPER Reserve	20,000,000

Debt Service
	General Debt Service	(52,904,635)

TOTAL CURRENT OPERATIONS – GENERAL FUND	$    313,685,191

General Fund Availability Statement
SECTION 2.2.(a)  Section 2.2(a) of S.L. 2011‑145 is repealed. The General Fund availability used in adjusting the 2012‑2013 budget is shown below:

		FY 2012‑2013
Unappropriated Balance Remaining	$           41,232,325
Anticipated Overcollections from FY 2011‑2012	232,500,000
Anticipated Reversions for FY 2011‑2012	205,500,000
Net Supplemental Medicaid Appropriation (S.L. 2012‑2)	(154,000,000)
Less Earmarkings of Year‑End Fund Balance
	Savings Reserve Account	0
	Repairs and Renovations Reserve Account	(62,048,960)
Beginning Unreserved Fund Balance	$        263,183,365

Revenue Based on Existing Tax Structure	$   18,931,200,000

Nontax Revenue	
	Investment Income	$          21,600,000
	Judicial Fees	258,700,000
	Disproportionate Share	115,000,000
	Insurance	73,700,000
	Other Nontax Revenues	304,400,000
	Highway Trust Fund Transfer	27,600,000
	Highway Fund Transfer	212,280,000
		Total – Nontax Revenues	$    1,013,280,000

Subtotal General Fund Availability	$  20,207,663,365

Adjustments to Availability: 2012 Session
	Education Lottery Revenue to K‑12	$         41,974,141
	E‑Commerce Reserve Cash Balance	1,347,397
	Charitable Licensing Receipts	979,752
	One NC Fund Cash Balance	30,000,000
	Insurance Regulatory Fund	166,613
	Work Opportunity Tax Credit Extension	(800,000)
	Sales Tax Refund Application Extension for Passenger Air Carriers	(6,300,000)
	Judicial Fees	(290,000)
	Sale of State Assets Receipt	(20,000,000)
	Highway Fund Transfer	7,879,151
	Teaching Fellows Trust Fund Cash Balance	543,526
	Information Technology Internal Service Fund Cash Balance	4,000,000
	Reserve for HB 1104 (Equal Opportunity Tax Credit)	(617,379)
	National Mortgage Settlement	9,610,000
Subtotal Adjustments to Availability:	$          68,493,201

Revised Total General Fund Availability	$   20,276,156,566
	Less General Fund Appropriations	$   20,276,156,566

Balance Remaining	$ 	0

SECTION 2.2.(b)  Notwithstanding the provisions of G.S. 143C‑4‑3, the State Controller shall transfer only sixty‑two million forty‑eight thousand nine hundred sixty dollars ($62,048,960) from the unreserved fund balance to the Repairs and Renovations Reserve Account on June 30, 2012.
SECTION 2.2.(c)  Funds transferred under this section to the Repairs and Renovations Reserve Account are appropriated for the 2012‑2013 fiscal year to be used in accordance with G.S. 143C‑4‑3.
SECTION 2.2.(d)  Notwithstanding G.S. 143C‑4‑2 and pursuant to subsection (a) of this section, the State Controller shall transfer any remaining unreserved fund balance to the Savings Reserve Account on June 30, 2012. This is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.
SECTION 2.2.(e)  Notwithstanding any other provision of law to the contrary, the sum of four million dollars ($4,000,000) shall be transferred from the Information Technology Internal Service Fund ending balance for State fiscal year 2011‑2012, Budget Code 74660, to the State Controller to be deposited in Nontax Budget Code 19978 or the appropriate budget code as determined by the State Controller for the 2012‑2013 fiscal year.
SECTION 2.2.(f)  Notwithstanding any other provision of law to the contrary, the sum of five hundred forty‑three thousand five hundred twenty‑six dollars ($543,526) from the Department of Public Instruction Trust Special‑Teaching Fellows shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 or the appropriate budget code as determined by the State Controller for the 2012‑2013 fiscal year.
SECTION 2.2.(g)  Notwithstanding any other provision of law to the contrary, the sum of thirty million dollars ($30,000,000) from the Department of Commerce, One North Carolina Fund, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 or the appropriate budget code as determined by the State Controller for the 2012‑2013 fiscal year.
SECTION 2.2.(h)  Notwithstanding any other provision of law to the contrary, the sum of one million three hundred forty‑seven thousand three hundred ninety‑seven dollars ($1,347,397) from the E‑Commerce Reserve, Budget Code 24100, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 or the appropriate budget code as determined by the State Controller for the 2012‑2013 fiscal year.
SECTION 2.2(i).  Notwithstanding any other provision of law to the contrary, the sum of five million dollars ($5,000,000) shall be transferred from the Highway Fund to the General Fund for the 2012‑2013 fiscal year for the State Highway Patrol, four million dollars ($4,000,000) of which shall be used for retirement system contributions and one million dollars ($1,000,000) of which shall be used for State Health Plan contributions.
SECTION 2.2(j).  Notwithstanding any other provision of law to the contrary, the sum of two million two hundred ninety‑four thousand one hundred fifty‑one dollars ($2,294,151), recurring, shall be transferred from the Highway Fund to the General Fund for the 2012‑2013 fiscal year, and each year thereafter, and the sum of five hundred eighty‑five thousand dollars ($585,000), nonrecurring, shall be transferred from the Highway Fund to the General Fund for the 2012‑2013 fiscal year.  The funds transferred under this subsection are to be used to support operations and maintenance costs of the Voice Interoperability Plan for Emergency Responders (VIPER) system operated by the Department of Public Safety, State Highway Patrol.
SECTION 2.2.(k)  This section becomes effective June 30, 2012.

PART III. Current Operations/Highway Fund

Current Operations/Highway Fund
SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are adjusted for the fiscal year ending June 30, 2013, according to the following schedule. Amounts set out in brackets are reductions from Highway Fund Appropriations for the 2012‑2013 fiscal year.

Current Operations – Highway Fund		2012‑2013

Department of Transportation
	Administration	$       1,595,705 

Division of Highways	
	Administration	(164,266)
	Construction	(39,431,107)
	Maintenance	(67,063,119)
	Planning and Research	0
	OSHA Program	0

Ferry Operations	(500,000)

State Aid	
	Municipalities	(912,604)
	Public Transportation	(2,588,327)
	Airports	(3,909,618)
	Railroads	(500,000)

Governor's Highway Safety Program	0
Division of Motor Vehicles	50,204,157
	Other State Agencies, Reserves, and Transfers	(66,860,821)
Capital Improvements	0
	
Total			$   (130,130,000)

Highway Fund Availability Statement
SECTION 3.2.  Section 3.2 of S.L. 2011‑145 is repealed. The Highway Fund availability used in adjusting the 2012‑2013 fiscal year budget is shown below:

Highway Fund Availability Statement		2012‑2013

Unreserved Fund Balance	$        10,000,000
Adjustment to Revenue Availability	(22,000,000)
Beginning Fund Balance	0
Estimated Revenue	2,016,030,000

Total Highway Fund Availability	2,004,030,000

Unappropriated Balance	$                       0

PART IV. Highway Trust Fund Appropriations

Current Operations/Highway Trust Fund
SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are adjusted for the fiscal year ending June 30, 2013, according to the following schedule. Amounts set out in brackets are reductions from Highway Trust Fund Appropriations for the 2012‑2013 fiscal year.

Current Operations – Highway Trust Fund		2012‑2013

Intrastate System	$    (9,338,145)
Aid to Municipalities	(979,789)
Secondary Roads	(979,789)
Urban Loops	(3,775,957)
Program Administration	(1,516,320)
Turnpike Authority	0
Transfer to General Fund	0
Transfer to Highway Fund	0
Debt Service	0
Mobility Fund	45,000,000
Reserves		(45,000,000)

Grand Total Current Operations	$  (16,590,000)

Highway Trust Fund Availability Statement
SECTION 4.2.  Section 4.2 of S.L. 2011‑145 is repealed.  The Highway Trust Fund availability used in developing the 2012‑2013 fiscal year budget is shown below:

Highway Trust Fund Availability		2012‑2013

Unencumbered Balance from Previous Year	$      15,000,000
Estimated Revenue	1,055,320,000

Total Highway Trust Fund Availability	$ 1,070,320,000

PART V. Other Appropriations

Eliminate Reporting Requirement/Appropriation of Other Funds/Use of Departmental Receipts
SECTION 5.1.  Section 5.1 of S.L. 2011‑145 reads as rewritten:
"SECTION 5.1.(a)  State funds, as defined in G.S. 143C‑1‑1(d)(25), are appropriated as provided in G.S. 143C‑1‑2 for the 2011‑2013 fiscal biennium, with the adjustments made to the continuation budget as reflected in the Governor's Recommended Budget and Budget Support Document, as follows:
(1)	For all budget codes listed in "The State of North Carolina Governor's Recommended Budget, 2011‑2013" and in the Budget Support Document, cash balances and receipts are appropriated up to the amounts specified, as adjusted by the General Assembly, for the 2011‑2012 fiscal year and the 2012‑2013 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items or as otherwise authorized by the General Assembly. Expansion budget funds listed in those documents are appropriated only as otherwise provided in this act.
(2)	Notwithstanding the provisions of subdivision (1) of this subsection:
a.	Any receipts that are required to be used to pay debt service requirements for various outstanding bond issues and certificates of participation are appropriated up to the actual amounts received for the 2011‑2012 fiscal year and the 2012‑2013 fiscal year and shall be used only to pay debt service requirements.
b.	Other funds, cash balances, and receipts of funds that meet the definition issued by the Governmental Accounting Standards Board of a trust or agency fund are appropriated for and in the amounts required to meet the legal requirements of the trust agreement for the 2011‑2012 fiscal year and the 2012‑2013 fiscal year.
"SECTION 5.1.(b)  Receipts collected in a fiscal year in excess of the amounts authorized by this section shall remain unexpended and unencumbered until appropriated by the General Assembly in a subsequent fiscal year, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by the State Budget Act. Overrealized receipts are appropriated up to the amounts necessary to implement this subsection.
"
"SECTION 5.1.(d)  Notwithstanding subsections (a) and (b) of this section, there is appropriated from the Reserve for Reimbursements to Local Governments and Shared Tax Revenues for each fiscal year an amount equal to the amount of the distributions required by law to be made from that reserve for that fiscal year.
"SECTION 5.1.(e)  Notwithstanding any State law to the contrary and consistent with any applicable federal law and the State's Cash Management Policy, departmental receipts, as defined in G.S. 143C‑1‑1(d)(10), shall be used first and to the maximum amount available to support agency operations, budgetary requirements, and any other legally authorized activities prior to the use of funds from General Fund tax and nontax receipt sources specified in Section 2.2(a) of this act for those same or related purposes."

Other Receipts From Pending Grant Awards Revisions/subcommittee established
SECTION 5.2.  Section 5.2 of S.L. 2011‑145 is amended by adding a new subsection to read:
"(e)	The Joint Legislative Commission on Governmental Operations shall establish a subcommittee to review any budget‑related issues, including pending grant awards received pursuant to this section on a monthly basis. The subcommittee shall consist of, at a minimum, the Chair of the Appropriations Committee of the House of Representatives, the Chair of the Senate Appropriations/Base Budget Committee, at least one member from each of the Appropriations Subcommittees in the House of Representatives, and one member from each of the Appropriations/Base Budget Committees of the Senate."

Education Lottery
SECTION 5.3.(a)  Notwithstanding G.S. 18C‑164, the revenue used to support appropriations made in this act is transferred from the State Lottery Fund in the amount of four hundred sixty‑six million nine hundred forty‑seven thousand seven hundred seventy‑one dollars ($466,947,771) for the 2012‑2013 fiscal year.
SECTION 5.3.(b)  Notwithstanding G.S. 18C‑164, the North Carolina State Lottery Commission shall not transfer funds to the Education Lottery Reserve Fund for the 2011‑2012 fiscal year or the 2012‑2013 fiscal year.
SECTION 5.3.(c)  Section 5.4(f) of S. L. 2011‑145 is repealed.
SECTION 5.3.(d)  Notwithstanding G.S. 18C‑164(f), if actual net lottery revenues for the 2011‑2012 fiscal year exceed the amounts appropriated in Section 5.4(b) of S.L. 2011‑145, the excess net lottery revenues shall be transferred as required under subsection (a) of this section.
SECTION 5.3.(e)  Of the amount specified in subsection (a) of this section, forty‑one million nine hundred seventy‑four thousand one hundred forty‑one dollars ($41,974,141) shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 or the appropriate budget code as determined by the State Controller. These funds shall be used solely to support the General Fund appropriations to the State's public schools.
SECTION 5.3.(f)  Of the amount specified in subsection (a) of this section, the amount of four hundred twenty‑four million nine hundred seventy‑three thousand six hundred thirty dollars ($424,973,630) shall be transferred to the Education Lottery Fund for the 2012‑2013 fiscal year.
SECTION 5.3.(g)  Notwithstanding G.S. 18C‑164, the appropriations made from the Education Lottery Fund for the 2012‑2013 fiscal year are as follows:

Teachers in Early Grades	$ 220,643,188
Prekindergarten Program	$   63,135,709
Public School Building Capital Fund	$ 100,000,000
Scholarships for Needy Students	$   30,450,000
UNC Need‑Based Financial Aid	$   10,744,733
Total Appropriation	$ 424,973,630
SECTION 5.3.(h)  Notwithstanding G.S. 18C‑164(c), G.S. 115C‑546.2(d), or any other provision of law, funds appropriated in this section to the Public School Building Capital Fund for the 2012‑2013 fiscal year shall be allocated to counties on the basis of average daily membership (ADM).
SECTION 5.3.(i)  Notwithstanding G.S. 18C‑164(c), Article 35A of Chapter 115C of the General Statutes, or any other provision of law, the funds appropriated in this section for UNC Need‑Based Financial Aid shall be administered in accordance with the policy adopted by the Board of Governors of The University of North Carolina.

PART VI. General Provisions

Remove Consultation By Governor Requirement/Interim Appropriations Committees
SECTION 6.1.  Section 6.5 of S.L. 2011‑145 is repealed.

Extend Reporting Date/Utilization Review/Public School and Public Health Nurses
SECTION 6.2.  Section 6.9(b) of S.L. 2011‑145 reads as rewritten:
"SECTION 6.9.(b)  By December 1, 2012, the Fiscal Research Division shall report to the House and Senate Appropriations Committees."

Voice Interoperability Plan for Emergency Response (VIPER) System
SECTION 6.3.(a)  It is the intent of the General Assembly to continue to support full development and implementation of the State's Voice Interoperability Plan for Emergency Response (VIPER) system in the 2012‑2013 fiscal year and in subsequent fiscal years. However, no State agency, office, commission, or non‑State entity shall enter into a new contract or amend any existing contract that would commit or otherwise spend any State funds, as defined in G.S. 143C‑1‑1(d)(25), during the 2011‑2012 fiscal year unless those funds were expressly appropriated by the General Assembly for the State's VIPER system.
SECTION 6.3.(b)  Notwithstanding any other provision of law to the contrary, any unspent State funds remaining on June 30, 2012, from the Department of Public Safety (Department) or any funds remaining in the budgets of the previous agencies that now constitute the Department shall revert to the State's General Fund.
SECTION 6.3.(c)  Effective July 1, 2012, the Department is hereby authorized to commit or spend up to twenty million dollars ($20,000,000) in the 2012‑2013 fiscal year to continue development and implementation of the State's VIPER system.
SECTION 6.3.(d)  The Department of Public Safety shall report to the Joint Legislative Committee on Information Technology and the Joint Legislative Oversight Committee on Justice and Public Safety on a quarterly basis on the progress of the State's VIPER system.

Extend Maturity Date/Global Transpark
SECTION 6.4.  G.S. 147‑69.2(b)(11), as amended by Section 7 of S.L. 2005‑144, Section 2 of S.L. 2005‑201, Section 28.17 of S.L. 2005‑276, Section 27.7 of S.L. 2007‑323, Section 25.2 of S.L. 2009‑451, Section 6.10(a) of S.L. 2011‑145, and Section 4(b) of S.L. 2011‑340, reads as rewritten:
"(b)	It shall be the duty of the State Treasurer to invest the cash of the funds enumerated in subsection (a) of this section in excess of the amount required to meet the current needs and demands on such funds. The State Treasurer may invest the funds as provided in this subsection. If an investment was authorized by this subsection at the time the investment was made or contractually committed to be made, then none of the percentage or other limitation on investments set forth in this subsection shall be construed to require the State Treasurer to subsequently dispose of the investment or fail to honor any contractual commitments as a result of changes in market values, ratings, or other investment qualifications.
…
(11)	With respect to assets of the Escheat Fund, obligations of the North Carolina Global TransPark Authority authorized by G.S. 63A‑4(a)(22), not to exceed twenty‑five million dollars ($25,000,000), that have a final maturity not later than October 1, 2015. The obligations shall bear interest at the rate set by the State Treasurer. No commitment to purchase obligations may be made pursuant to this subdivision after September 1, 1993, and no obligations may be purchased after September 1, 1994. In the event of a loss to the Escheat Fund by reason of an investment made pursuant to this subdivision, it is the intention of the General Assembly to hold the Escheat Fund harmless from the loss by appropriating to the Escheat Fund funds equivalent to the loss.
		If any part of the property owned by the North Carolina Global TransPark Authority now or in the future is divested, proceeds of the divestment shall be used to fulfill any unmet obligations on an investment made pursuant to this subdivision."

National Mortgage Settlement appropriations
SECTION 6.5.(a)  The Consent Judgment in U.S. v. Bank of America, Civil Action No. 12‑CV‑0361, dated April 4, 2012, provides for monetary payments to the State and, therefore, the General Assembly authorizes the expenditure of these State revenues as set forth in subsection (b) of this section.
SECTION 6.5.(b)  Settlement funds received by the State pursuant to the Consent Judgment in U.S. v. Bank of America, Civil Action No. 12‑CV‑0361, dated April 4, 2012, shall be deposited and credited in accordance with the North Carolina Constitution and Chapter 143C of the General Statutes and are appropriated for the 2012‑2013 fiscal year as follows:
(1)	The sum of four million seven hundred eighty thousand dollars ($4,780,000) to the Department of Justice, Consumer Protection Division, for financial fraud detection and prevention efforts.
(2)	The sum of six million six hundred ninety thousand dollars ($6,690,000) to the Administrative Office of the Courts to be administered by the North Carolina Conference of District Attorneys. Funds shall be used for grants and training for prosecutorial offices to expand prosecution of lending and financial crimes.
(3)	The sum of nineteen million one hundred twenty thousand dollars ($19,120,000) to the Housing Finance Agency for housing counselors to help distressed homeowners.
(4)	The sum of five million seven hundred forty thousand dollars ($5,740,000) in civil penalties to North Carolina public schools.
(5)	The sum of two million eight hundred seventy thousand dollars ($2,870,000) to the Department of Justice, State Bureau of Investigation, to expand its accounting and financial investigative ability and its expertise to investigate financial and lending crimes.
SECTION 6.5.(c)  No State agency receiving money from the National Mortgage Settlement may make expenditures for purposes not authorized by the General Assembly, nor may a State agency spend an amount totaling more than that appropriated by the General Assembly; however, a State agency may use the funds to offset 2012‑2013 fiscal year nonrecurring reductions. Any positions established by State agencies with funds appropriated pursuant to this section shall be temporary or time‑limited positions.
SECTION 6.5.(d)  Nothing in this section is intended to be in conflict with the mandatory provisions of the Consent Judgment.

Strategic Investments in North Carolina Initiative
SECTION 6.6.(a)  Findings. – 
(1)	The State's most valuable resources are its citizens and its extensive network of small businesses across the State.
(2)	The 2008 Great Recession had a devastating impact on the State's economy.
(3)	The recession forced thousands of North Carolinians into long‑term unemployment, and the State's unemployment rate stands at nine and four‑tenths percent (9.4%) as of April 2012.
(4)	The State's community colleges are best equipped to respond rapidly to the specific job skills needed by North Carolina's businesses and best suited to train the unemployed for reentry into the workforce.
(5)	The State's current economic climate has made it difficult for small businesses to access operating or expansion capital.
(6)	The Rural Economic Development Center has a presence in all 100 counties and is already working with 65 banks across the State to make capital available through small business loans on a 10:1 basis.
(7)	Therefore, the General Assembly is undertaking measures, collectively known as the 2012 Strategic Investments in North Carolina Initiative, to identify and assist small companies in order to create new jobs and to invest in North Carolina's workforce to prepare them for those jobs.
SECTION 6.6.(b)  Invest in the State's Workforce. – Of the funds appropriated in this act to the Community Colleges System Office, the sum of ten million dollars ($10,000,000) shall be used for the North Carolina Back‑to‑Work Program, a retraining program to prepare North Carolinians facing long‑term unemployment for new careers.  The program shall provide students with job training and retraining; employability skills, including a Career Readiness Certificate; and third‑party, industry‑recognized credentials.  The Community Colleges System Office and the Department of Commerce shall jointly recommend to the State Board of Community Colleges up to 20 colleges to which to allocate available funds based on (i) the number of long‑term unemployed individuals in the college's service area, (ii) the percentage of long‑term unemployed individuals in the college's service area, (iii) the availability of jobs for which the North Carolina Back‑to‑Work Program could prepare students, and (iv) the college's demonstrated willingness and ability to successfully implement the program.  The money may only be used for the following activities:  student instruction, student support and coaching, and targeted financial assistance for students, including assistance with tuition, registration fees, books, and certification costs.
SECTION 6.6.(c)  Support and Grow Small Businesses. – Of the funds appropriated in this act to the Rural Economic Development Center, the sum of four million five hundred thousand dollars ($4,500,000) shall be used to expand its efforts with banks to make small business loans available through the Loan Participation Program, a program that helps lenders make term loans of between one hundred thousand dollars ($100,000) and two million dollars ($2,000,000) to small businesses of 100 or fewer employees.
SECTION 6.6.(d)  JDIG Enhancement. – In order to provide increased flexibility to the Department of Commerce to award grants to as many companies as are interested and eligible to receive funds from the Job Development Investment Grant Program, the 25‑project cap is eliminated in Section 13.6 of this act.
SECTION 6.6.(e)  One NC Fund Enhancement. – Of the funds appropriated in this act to the One North Carolina Fund, the sum of nine million dollars ($9,000,000) in recurring funds shall be used to facilitate strategic planning and budgeting of the State's resources while (i) freeing up one‑time money for other job creation efforts and critical needs yet (ii) maintaining the General Assembly's commitment to supporting economic development and job creation across the State, as directed in Section 13.6 of this act.
SECTION 6.6.(f)  Golden LEAF Investments. – The General Assembly strongly encourages The Golden LEAF Foundation to consider taking steps to ensure that the investment of its public funds generates new economic activity and job opportunities.  In addition to its financial return standards, The Golden LEAF Foundation shall adopt job creation standards that focus on underwriting economic activity that creates jobs and supports the State's valuable small businesses.  The Golden LEAF Foundation shall include in its annual report to the Joint Legislative Commission on Governmental Operations the standards adopted pursuant to this section, jobs created as a result of the standards, and the investments made and the amount of the investments made.
SECTION 6.6.(g)  Continuing Economic Development Commitment. – The General Assembly in Section 2.2 of this act has reserved the sum of eight hundred thousand dollars ($800,000) to extend the Work Opportunity Tax Credit, a credit based on wages paid to North Carolinians who were hired despite facing barriers to employment, including TANF and SNAP recipients, high‑risk youth, and unemployed and disabled veterans.  The General Assembly is reaffirming, by extending the sunset on, other, long‑established, productive tax benefits that have increased employment in the State by luring jobs with high pay and good benefits, including the following:
(1)	Tax credits for renewable fuel facilities, biodiesel producers, and renewable energy property facilities.
(2)	Tax credits for growing businesses.
(3)	Sales tax benefits ensuring North Carolina airports continue to be utilized as hubs for major air companies.
(4)	Sales tax benefits to promote private enterprise investment in low‑wealth counties.
(5)	Sales tax benefits to encourage investment in industrial facilities and analytical services within the State.
SECTION 6.6.(h)  Travel and Tourism. – The General Assembly recognizes the critical importance of the State's second largest industry, tourism.   To that end, the General Assembly is making further strategic investment in the marketing of the State as a tourist destination.
SECTION 6.6.(i)  Business Formation. – The General Assembly understands the economic hurdles faced by individuals who are currently unemployed but who wish to engage in entrepreneurial efforts and will seek to waive the filing fee for filing articles of organization for limited liability companies with the Secretary of State for those individuals.

executive order No. 115/Hurricane Irene Disaster Loans
SECTION 6.7.(a)  Notwithstanding Executive Order No. 115, Proclamation of a State of Disaster for Pamlico and Tyrrell Counties,  issued on February 21, 2012, or any other law to the contrary, the Counties of Pamlico and Tyrrell, upon proof of flood insurance coverage to the Department of Public Safety, Emergency Management Section, shall not be held liable for that portion of funds borrowed under Executive Order No. 115 to cover damage sustained to their county school buildings and county school structures as a result of Hurricane Irene.
SECTION 6.7.(b)  If Pamlico or Tyrrell County allows the flood insurance coverage required in subsection (a) of this section to lapse at any time, that county shall be liable for the full repayment of funds borrowed under Executive Order No. 115. 

Transitions To Community Living Initiative
SECTION 6.8.(a)  The General Assembly finds that the State's long‑term care industry plays a vital role in ensuring that citizens are afforded opportunities for safe housing and adequate client‑centered supports in order to live as independently as possible in their homes and communities across the State. This role is consistent with citizens of the State having the opportunity to live in the most appropriate, integrated settings of their choice.
SECTION 6.8.(b)  Blue Ribbon Commission on Transitions to Community Living. – There is established the Blue Ribbon Commission on Transitions to Community Living (Commission).  The Commission shall (i) examine the State's system of community housing and community supports for people with severe mental illness, severe and persistent mental illness, and intellectual and developmental disabilities and (ii) develop a plan that continues to advance the State's current system into a statewide system of person‑centered, affordable services and supports that emphasize an individual's dignity, choice, and independence.  In the execution of its duties, the Commission shall consider the following:
(1)	Policies that alter the State's overreliance on institutionally based services to community‑based services delivered as close to an individual's home and family as possible.
(2)	Best practices in both the public and private sectors in managing and administering long‑term care to the disabled.
(3)	An array of services and supports for people with severe mental illness and severe and persistent mental illness, such as respite, community‑based supported housing and community‑based mental health services, to include evidence‑based, person‑centered recovery supports and crisis services and supported employment.
(4)	For adults with intellectual and other developmental disabilities, expansion of community‑based services and supports, housing options and supported work. Maximize the use of habilitation services that may be available via the Medicaid "I" option for those who do not meet the ICF‑MR level of need.
(5)	Methods to responsibly manage the growth in long‑term care spending, including use of Medicaid waivers.
(6)	Options for repurposing existing resources while considering the diverse economic challenges in communities across the State.
(7)	Opportunities for systemic change and maximization of housing, and service and supports funding streams including State/County Special Assistance and the State's Medicaid Program.
(8)	The appropriate role of adult care homes and other residential settings in the State.
(9)	Other resources that might be leveraged to enhance reform efforts.
SECTION 6.8.(c)  The Commission shall be composed of 32 members as follows:
(1)	Six members of the House of Representatives appointed by the Speaker of the House of Representatives.
(2)	Six members of the Senate appointed by the President Pro Tempore of the Senate.
(3)	Secretary of the Department of Health and Human Services or the Secretary's designee.
(4)	Director of the Housing Finance Agency or the Director's  designee.
(5)	Director of the Division of Mental Health, Developmental Disabilities and Substance Abuse Services or the Director's designee.
(6)	Two mental health consumers or their family's representatives.
(7)	Two developmental disabilities consumers or their family representatives.
(8)	Two persons in the field of banking or representing a financial institution with housing finance expertise.
(9)	Two representatives of local management entities or managed care organization representatives.
(10)	A county government representative.
(11)	NC Long‑Term Care Facilities Association representative.
(12)	NC Assisted Living Association representative.
(13)	Family care home representative.
(14)	Developmentally disabled adult group home representative.
(15)	Mental health group home representative.
(16)	Two representatives of service providers with proven experience in innovated housing and support services in the State.
(17)	Director of the Division of Medical Assistance or an agency designee.
The Secretary of the Department of Health and Human Services shall ensure adequate staff representation and support from the following: Division of Mental Health, Developmental Disabilities and Substance Abuse Services, Division of Aging and Adult Services, Division of Health Services Regulations, Division of Social Services and other areas as needed.
The Commission shall appoint a Subcommittee on Housing composed of 15 members and a Subcommittee on Adult Care Homes. 
The chairs shall jointly appoint members described in subdivisions (6) through (16) of this subsection and shall fill vacancies in those positions. The Commission shall meet at the call of the chairs. Members of the Commission shall receive per diem, subsistence, and travel expenses as provided in G.S. 120‑3.1, 138‑5, or 138‑6, as appropriate. The Commission may contract for consultant services as provided in G.S. 120‑32.02. Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional staff to assist the Commission in its work. Clerical staff shall be furnished to the Commission through the offices of the House of Representatives and Senate Directors of Legislative Assistants. The Commission may meet in the Legislative Building or the Legislative Office Building. The Commission may exercise all of the powers provided under G.S. 120‑19 through G.S. 120‑19.4 while in the discharge of its official duties. The funds needed to support the cost of the Commission's work shall be transferred from the Department of Health and Human Services upon request of the Legislative Services Director.
SECTION 6.8.(d)  Transitions to Community Living Fund. – There is established the Transitions to Community Living Fund (Fund) to facilitate implementation of the plan required in subsection (b) of this section.  Accordingly, the State Controller shall reserve the sum of fifty million dollars ($50,000,000) for transfer and appropriation into the Fund as directed by this section.  This is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution.
SECTION 6.8.(e)  Of the total reserved in subsection (d) of this section for the Fund, the sum of ten million three hundred thousand dollars ($10,300,000) is appropriated to support the Department of Health and Human Services (Department) in its plan for transitioning individuals with severe mental illness and severe and persistent mental illness  into community living arrangements, including establishing a rental assistance program.  If the State executes an agreement with the U.S. Department of Justice (USDOJ) in response to USDOJ findings dated July 28, 2011, these funds may be used to implement the requirements of the agreement.  The Department may issue temporary rules to implement the plan or agreement referenced in this section.
SECTION 6.8.(f)  Of the total reserved in subsection (d) of this section for the Fund, the sum of thirty‑nine million seven hundred thousand dollars ($39,700,000) is earmarked for implementation of the State's plan to provide short‑term assistance to adult care homes as they transition into a key component of the State's Transitions to Community Living Initiative.
Notwithstanding any law to the contrary, upon consultation with the Joint Legislative Oversight Commission on Health and Human Services on the planned uses of the Fund, moneys may be transferred into the Department's budget and are hereby appropriated.
SECTION 6.8.(g)  The Department shall report its progress in complying with subsection (e) of this section to the House Appropriations Subcommittee on Health and Human Services and the Senate Committee on Health and Human Services, and the Fiscal Research Division no later than January 2, 2013, and a final report no later than April 1, 2013.
SECTION 6.8.(h)  The Commission shall issue an interim report by October 1, 2012, and a final plan to the 2013 General Assembly no later than February 1, 2013, upon which time the Commission shall expire.

Part VI‑A. Information Technology

InformaTion technology Fund/Availability
SECTION 6A.1.  Section 6A.1(a) of S.L. 2011‑145 reads as rewritten:
"SECTION 6A.1.(a)  The availability used to support appropriations made in this act from the Information Technology Fund established in G.S. 147‑33.72H is as follows:
	FY 2011‑2012	FY 2012‑2013

Appropriation from General Fund	$	4,458,142	$	6,158,142
Interest	$	25,000	$	25,000
IT Fund Balance June 30	$	792,000	$	794,928
Transfer to General Fund			$	(750,000)

Total Funds Available	$	5,275,142		
			$	6,228,070

Appropriations are made from the Information Technology Fund for the 2011‑2013 fiscal biennium as follows:
	FY 2011‑2012	FY 2012‑2013
Information Technology Operations
Center for Geographic Information and Analysis	$	599,347	$	599,347
Enterprise Security Risk Management	$	864,148	$	864,148
Enterprise Project Management Office	$	1,473,285	$	1,473,285
Architecture and Engineering	$	581,986	$	
				851,986
Criminal Justice Information Network	$	166,422	$	166,422
Statewide IT Procurement	$	0	$	0
State Web site	$	100,000	$	0
ITS Overhead Reduction	$	(91,486)	$	(91,486)
Subtotal Information Technology Operations	$	3,693,702	$	
				3,863,702
Information Technology Projects
State Portal	$	0	$	0
IT Consolidation	$	776,440		
			$	534,440
Transfer to OSC for E‑Forms	$	500,000	$	500,000
Subtotal Information Technology Projects	$1,276,440					$	1,034,440Data Integration License Funding Transfer to State
Agencies	$	200,000	$	1,200,000
Position Transfer to Office of State
	Budget and Management	$	105,000	$	105,000
Unreserved Fund Balance	$	24,928
Total	$	5,275,142		
			$	6,228,070".

office of information technology services/Center for geographic information and analysis/GIS functions and cost recovery
SECTION 6A.2.  G.S. 147‑33.82(a) is amended by adding a new subdivision to read:
"(a)	In addition to any other functions required by this Article, the Office of Information Technology Services shall:
. . . 
(10)	Provide geographic information systems services through the Center for Geographic Information and Analysis on a cost recovery basis. The Office of Information Technology Services and the Center for Geographic Information and Analysis may contract for funding from federal or other sources to conduct or provide geographic information systems services for public purposes."

Tax information management system/Additional Public‑Private Partnership Authorized
SECTION 6A.3.1.(a)  Additional Public‑Private Partnership. – The Secretary of Revenue may enter into an additional public‑private arrangement in order to expand the implementation of the Tax Information Management System (TIMS). All such arrangements will terminate June 30, 2018. The public‑private arrangement may include terms necessary to implement additional revenue‑increasing or cost‑savings components if all of the following conditions are met:
(1)	The funding of the project under the arrangement comes from revenue generated by or cost savings resulting from the project.
(2)	The funding of the project is dependent on increased‑revenue or cost‑savings streams that are different from the existing benefits stream for the implementation of TIMS.
(3)	The project involves additional identified initiatives that will be integrated into the TIMS solution.
SECTION 6A.3.1.(b)  Contracts. – Work under an additional public‑private arrangement that is authorized by this section may be contracted by requests for proposals, modifications to the existing contracts, purchases using existing contracts, or other related contract vehicles.
SECTION 6A.3.1.(c)  Management/Performance Measurement. – The Secretary of Revenue shall follow the existing model for public‑private arrangement oversight and shall establish a measurement process to determine the increased revenue or cost savings attributed to the additional public‑private arrangement authorized by this section. To accomplish this, the Secretary shall consult subject matter experts in the Department of Revenue, in other governmental units, and in the private sector, as necessary. At a minimum, the measurement process shall include all of the following:
(1)	Calculation of a revenue baseline against which the increased revenue attributable to the project is measured and a cost‑basis baseline against which the cost savings resulting from the project are measured.
(2)	Periodic evaluation to determine whether the baselines need to be modified based on significant measurable changes in the economic environment.
(3)	Monthly calculation of increased revenue and cost savings attributable to contracts executed under this section.
SECTION 6A.3.1.(d)  Funding. – Of funds generated from increased revenues or cost savings as compared to the baselines established by subdivision (c)(1) of this section, in the General Fund,  the Highway Fund, and that State portion of the Unauthorized Substance Tax collections of the Special Revenue Fund, the sum of up to a total of sixteen million dollars ($16,000,000) may be used by the Office of State Budget and Management to make purchases related to the implementation of the additional public‑private arrangement authorized by this section, including payment for services from non‑State entities.
SECTION 6A.3.1.(e)  Internal Costs. – For the 2012‑2013 fiscal year, in addition to the funding authorized in subsection (d) of this section and Section 6A.5(a) of S.L. 2011‑145, the Department of Revenue may retain an additional sum of ten million two hundred twenty‑eight thousand dollars ($10,228,000) from benefits generated for the General Fund since the beginning of the public‑private partnership described under Section 6A.5(a) of S.L. 2011‑145. These funds shall be used as payment of internal costs for the fiscal biennium, and such funds are hereby appropriated for this purpose.
SECTION 6A.3.1.(f)  Expert Counsel Required. – Notwithstanding G.S. 114‑2.3, the Department of Revenue shall engage the services of private counsel with the pertinent information technology and computer law expertise to negotiate and review contracts associated with an additional public‑private arrangement authorized under this section.
SECTION 6A.3.1.(g)  Oversight Committee. – The Oversight Committee established under Section 6A.5(c) of S.L. 2011‑145 shall have the same responsibilities and duties with respect to an additional public‑private arrangement authorized by this section as it does with respect to public‑private arrangements to implement TIMS and the additional PDP components.
SECTION 6A.3.1.(h)  Reporting. – Beginning August 1, 2012, and quarterly thereafter, the Department of Revenue shall submit detailed written reports to the Chairs of the House of Representatives and Senate Committees on Appropriations, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division of the General Assembly. The report shall include an explanation of all of the following:
(1)	Details of each public‑private contract.
(2)	The benefits from each contract.
(3)	A comprehensive forecast of the benefits of using public‑private agreements to implement TIMS, the additional PDP components, and additional components authorized by this section, including cost savings and the acceleration of the project time line.
(4)	Any issues associated with the operation of the public‑private partnership.
SECTION 6A.3.1.(i)  Information Technology Project Oversight. – In addition to the oversight provided by the Oversight Committee established in Section 6A.5(c) of S.L. 2011‑145, the additional public‑private arrangement authorized by this section shall be subject to existing State information technology project oversight laws and statutes, and the project management shall comply with all statutory requirements and other criteria established by the State Chief Information Officer and the Office of State Budget and Management for information technology projects. The State Chief Information Officer and the Office of State Budget and Management shall immediately report any failure to do so to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the House of Representatives and Senate Committees on Appropriations, and the Fiscal Research Division.
SECTION 6A.3.2.  Extension. – Section 6A.5(c) of S.L. 2011‑145 reads as rewritten:
"SECTION 6A.5.(c)  There is established within the Department of Revenue the Oversight Committee for reviewing and approving the benefits measurement methodology and calculation process. The Oversight Committee shall review and approve in writing all contracts, including change orders, amendments to contracts, and addendums to contracts, before they are executed under this section. This shall include (i) details of each public‑private contract, (ii) the benefits from each contract, and (iii) a comprehensive forecast of the benefits of using public‑private agreements to implement TIMS and the additional PDP components, including the measurement process established for the Secretary of Revenue. The Oversight Committee shall approve all of the fund transfers for this project. Within five days of entering into a contract, the Department shall provide copies of each contract and all associated information to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the House of Representatives and Senate Committees on Appropriations, and the Fiscal Research Division.
The members of the Committee shall include the following:
(1)	The State Budget Director;
(2)	The Secretary of the Department of Revenue;
(3)	The State Chief Information Officer;
(4)	Two persons appointed by the Governor;
(5)	One member of the general public having expertise in information technology appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives; and
(6)	One member of the general public having expertise in economic and revenue forecasting appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate.
The State Budget Director shall serve as chair of the Committee. The Committee shall set its meeting schedule and adopt its rules of operation by majority vote. A majority of the members constitutes a quorum. Vacancies shall be filled by the appointing authority. Administrative support staff shall be provided by the Department of Revenue. Members of the Committee shall receive reimbursements for subsistence and travel expenses as provided by Chapter 138 of the General Statutes. The Committee shall terminate on June 30, 2018.
The Department shall provide copies of the minutes of each meeting and all associated information to the Joint Legislative Oversight Committee on Information Technology, the Chairs of the House of Representatives and Senate Committees on Appropriations, and the Fiscal Research Division."
SECTION 6A.3.3.  One‑Time Payment. – To accelerate the implementation of the Tax Information Management System, including any additional components authorized by Section 6A‑3.1.(a) of this act, the Office of State Budget and Management may authorize the Secretary of Revenue to make a one‑time payment of two million dollars ($2,000,000) to the vendor of TIMS for implementation of TIMS if all of the conditions of this section are satisfied. The one‑time payment shall be paid within 90 days of satisfaction of all conditions of this section or when sufficient funds are available, whichever is later. The source of funds for this payment is the same increased‑revenue and cost‑savings streams identified under Section 1 of this act. The payment authorized by this section is in addition to the payments authorized by Section 1 of this act. The mandatory conditions of this subsection are as follows:
(1)	Release 5 of the Enterprise Technology Management (ETM) project is initially implemented on or before July 31, 2013.
(2)	The post‑implementation defect rate for Release 5 of the ETM project is within standards agreed to by the Secretary and the vendor. For purposes of this section, the post‑implementation period is the period from the date of initial implementation until 90 days after initial implementation.
(3)	All defects identified as part of Release 5 of the ETM project before the end of the post‑implementation period are resolved within time frames agreed to by the Secretary and the vendor.

Information Technology Personal Services Contracts/ reporting change
SECTION 6A.4.  Section 6A.6(c) of S.L. 2011‑145 reads as rewritten:
"SECTION 6A.6.(c)  Beginning August 1, 2012, and quarterly thereafter, each State agency, department, and institution employing information technology personal services contractors, or contract personnel performing information technology functions, shall provide a detailed report on those contracts to the Office of State Budget and Management, the Office of State Personnel, the Office of Information Technology Services, the Joint Legislative Oversight Committee on Information Technology, and the Fiscal Research Division of the General Assembly. Each State agency's report shall include at least the following:
(1)	For each contracted information technology position:
a.	The title of the position, a brief synopsis of the essential functions of the position, and how long the position has existed.
b.	The name of the individual filling the position and the vendor company, if any, that regularly employs that individual.
c.	The type of contract, start date, and termination date.
d.	The length of time that the individual filling the contracted position has been employed by the State as a contractor in any position.
e.	The contracted position salary or hourly rate, the number of hours per year, and the total annualized cost of the contracted position.
f.	The salary and benefits cost for a State employee performing the same function.
g.	The purchase order number for the position.
h.	Whether the position can be converted to a State employee position. This determination will be certified by the State Information Technology Purchasing Office.
i.	When the agency anticipates converting the position to a State employee.
(2)	The total annual cost for information technology contractors and the total annual salary and benefits cost for filling the contract positions with State employees.
(3)	A determination of whether the information technology functions performed by the contractor can be performed by State employees.
(4)	All information required by this subsection related to information technology contractors regardless of the contracting source."

Office of information technology services/Internal service fund rate established/cash management
SECTION 6A.5.(a)  Section 6A.8(a) of S.L. 2011‑145 reads as rewritten:
"ITS/INTERNAL SERVICE FUND RATE ESTABLISHMENT/CASH MANAGEMENT
"SECTION 6A.8.(a)  For the 2011‑2012 fiscal year, receipts for the Information Technology Internal Service Fund shall not exceed one hundred ninety million dollars ($190,000,000), excluding a 60‑day balance for contingencies. Notwithstanding G.S. 147‑33.88, for the 2012‑2013 fiscal year, all receipts, regardless of the source, including agency allocations and fund‑to‑fund transfers, for the Information Technology Internal Service shall not exceed one hundred seventy million dollars ($170,000,000). Rates established by the Office of State Budget and Management (OSBM) to support the IT Internal Service Fund shall be based on the required fund limit. Established rates shall be adjusted within 30 days in the event the fund exceeds the prescribed limit. In the event that an increase in receipts for the IT Internal Service Fund is required, the State Chief Information Officer may implement the increase only after consultation with the Joint Legislative Commission on Governmental Operations. Overhead applied to IT Internal Service Fund rates shall not exceed ten percent (10%) of the rate."
SECTION 6A.5.(b)  Section 6A.8 of S.L. 2011‑145 is amended by adding a new subsection to read:
"(a1)	The 60‑day balance for contingencies shall be based on the maximum receipts permitted for each fiscal year, and any balance in excess of the limit must be refunded within 30 days of the first day when the fund balance exceeded the limitation amount. The Office of Information Technology Services shall limit collections each quarter to an amount not to exceed twenty‑five percent (25%) of the year's limit."
SECTION 6A.5.(c)  The State Chief Information Officer shall consult with the Joint Legislative Commission on Governmental Operations prior to:
(1)	Eliminating any services currently provided by the Office of Information Technology Services or the State Chief Information Officer.
(2)	Transferring positions currently funded by the Information Technology Fund to the IT Internal Service Fund.
Notwithstanding G.S. 120‑76.1(b), the consultation requirement is not satisfied if the Commission does not hold a meeting to hear the consultation within 90 days of receiving the report from the State Chief Information Officer.
SECTION 6A.5.(d)  Agency IT Expenses Cannot Exceed Appropriations. – During the 2012‑2013 fiscal year, no State agency shall be charged more for information technology services provided by the Office of the State Chief Information Officer or the Office of Information Technology Services than the amount specifically appropriated for that purpose to that agency, unless the increase is agreed to in writing by the agency and the Office of the State Chief Information Officer.
SECTION 6A.5.(e)  Limitation on Charges for Alternate Services. – In the event that the State Chief Information Officer discontinues or privatizes a service during the 2012‑2013 fiscal year, the amount that State agencies are charged for alternate services, inclusive of any service charge the State Chief Information Officer adds to the vendor charge, shall not exceed IT Internal Service Fund charges for the same service.
SECTION 6A.5.(f)  The State Chief Information Officer shall report on a monthly basis to the Chairs of the House of Representatives and Senate Committees on Appropriations, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division of the General Assembly. The reports required by this section shall include:
(1)	How close the receipts of the Information Technology Internal Service are to the limits set forth in Section 6A.8(a) of S.L. 2011‑145.
(2)	The rates established by the Office of State Budget and Management (OSBM) to support the IT Internal Service Fund.
(3)	The amount charged to date to each State agency for services provided by the Office of the State Chief Information Officer or the Office of Information Technology Services during the 2012‑2013 fiscal year.
(4)	The amount that State agencies are charged for alternate services in the event that a service is discontinued or privatized during the 2012‑2013 fiscal year, inclusive of any service charge the State Chief Information Officer adds to the vendor charge.

Information Technology Privatization
SECTION 6A.6.  Section 6A.9 of S.L. 2011‑145 reads as rewritten:
"SECTION 6A.9.(a)  Any privatization of any grouping of information technology services, or "towers," identified in the Infrastructure Study and Assessment (INSA) or any privatization to provide a new service or privatize an existing service shall require prior approval from the General Assembly. Funding to support any outsourcing of any of these towers or any privatization involving a new or existing service shall be specifically appropriated by the General Assembly for that purpose, to include any use of Information Technology Internal Service Fund receipts.
"SECTION 6A.9.(b)  Before privatizing any new or existing information technology service during the 2011‑2013 fiscal biennium, the State Chief Information Officer shall do all of the following:
(1)	Develop a detailed plan for implementing any privatization initiative to include the following:
a.	A governance and accountability structure for the privatization effort.
b.	Detailed time line with milestones.
c.	Any costs necessary to accomplish outsourcing with funding sources identified.
d.	Estimated monthly cost for each participating agency for the first five years of privatization.
e.	Risks associated with privatization, measures being taken to mitigate those risks, and any costs associated with the mitigation measures.
f.	Any security issues associated with outsourcing each application impacted by the outsourcing, with a detailed plan to mitigate those issues.
g.	A list of State employees to be terminated with information on their job description and how long they have been employed by the State, a schedule of when the terminations are to occur, the cost of terminating each employee, and plans to assist each terminated employee.
The State Chief Information Officer shall consult the Joint Legislative Commission on Governmental Operations and report to the Joint Legislative Oversight Committee on Information Technology on the completed plan prior to any implementation of privatization.
(2)	Have a detailed plan in place, to include associated costs and sources of funding, to return the function to State control in the event privatization fails to provide anticipated cost­savings or required service levels.
(3)	Privatize only those individual functions where verifiable market data collected after January 1, 2012, by a disinterested third‑party consultant shows that privatization will result in cost­savings to the State and there is no data identifying alternatives that generate greater savings, ensuring that agencies receive at a minimum the same level of service and functionality as the level prior to privatization.
(4)	Document and certify any anticipated savings resulting from privatization by individual function.
(5)	Ensure full disclosure of any privatization decisions that combine multiple services or towers into a single contract, including the costs associated with each specific service or tower included in the contract.
(6)	Ensure that any changes are made across the entire executive branch.
(7)	Consult the Joint Legislative Commission on Governmental Operations and report to the Joint Legislative Oversight Committee on Information Technology regarding the plan for funding any requirements formerly covered by the receipts from the privatized function.
"SECTION 6A.9.(b1)  Agency Participation in Privatization Initiatives Is Voluntary. – Notwithstanding any other provision of law, if a State‑administered information technology service is privatized, or a new service is provided through a private vendor, continued receipt of or participation in the service by State agencies shall be voluntary.
"SECTION 6A.9.(b2)  Agency Options in the Event of Privatization. – If a State‑administered information technology service is privatized, or a new privatized service is offered, State agencies may do any of the following:
(1)	Elect to discontinue receiving or participating in the service and to provide the service within the agency. If an agency elects to provide the service internally, any positions previously transferred to the Office of Information Technology Services to support the service shall be transferred back to that agency. The Office of the State Chief Information Officer and the Office of Information Technology Services shall provide necessary support to facilitate the transfers of positions.
(2)	Submit their own requests for proposal and contract with a vendor to provide the privatized service.
(3)	Enter into agreements with other agencies to independently obtain information technology services that have been privatized, either by participating in the other agency's current service or by executing contracts for services.
(4)	Elect to receive or participate in a new or newly privatized service.
"SECTION 6A.9.(b3)  Council of State Approval Required. – Notwithstanding any other provision of law, both requests for proposal and contracts privatizing State‑administered information technology services must be approved by the Council of State.
"SECTION 6A.9.(c)  After privatizing any major information technology function, the State Chief Information Officer shall do all of the following:
(1)	Report quarterly on the results of the privatization, including a detailed comparison of projected savings to actual cost, data on whether or not the vendor is meeting service level agreements, and an explanation of the reasons for any deficiency or difference.
(2)	Immediately notify the Joint Legislative Commission on Governmental Operations of any outsourcing effort that does not meet projected savings or required service levels for two quarters in a row or during any two quarters of a fiscal year, and develop a corrective action plan.
(3)	Terminate any contract where privatization fails to achieve projected savings or meet service levels over a period of 12 months.
"SECTION 6A.9.(d)  Reporting. – The State Chief Information Officer shall consult with the Joint Legislative Commission on Governmental Operations prior to issuing a request for proposal to privatize any State‑administered information technology service.
"SECTION 6A.9.(e)  Access by Private Vendors. – If the State Chief Information Officer provides to a potential vendor any information or access to State facilities in connection with or anticipation of the privatization of a State‑administered information technology service, the State Chief Information Officer shall provide the same information or access to all potential vendors that request it. The State Chief Information Officer shall certify the Officer's compliance with this subsection to the General Assembly."

Mobile Electronic device reporting change
SECTION 6A.7.  Section 6A.14(a) of S.L. 2011‑145, as amended by Section 6A.14(a) of S.L. 2011‑391, reads as rewritten:
"SECTION 6A.14.(a)  Every executive branch agency within State government shall develop a policy to limit the issuance and use of mobile electronic devices to the minimum required to carry out the agency's mission. As used herein, mobile communication device includes goods provided by commercial mobile radio service providers and services for mobile telecommunications governed by Title 47 of the Code of Federal Regulations. By September 1, 2011, each agency shall provide a copy of its policy to the Chairs of the Appropriations Committee and the Appropriations Subcommittee on General Government of the House of Representatives, the Chairs of the Appropriations/Base Budget Committee and the Appropriations Committee on General Government and Information Technology of the Senate, the Chairs of the Joint Legislative Oversight Committee on Information Technology, the Fiscal Research Division, and the Office of State Budget and Management.
State‑issued mobile electronic devices shall be used only for State business. Agencies shall limit the issuance of cell phones, smart phones, and any other mobile electronic devices to employees for whom access to a mobile electronic device is a critical requirement for job performance. The device issued and the plan selected shall be the minimum required to support the employees' work requirements. This shall include considering the use of pagers in lieu of a more sophisticated device. The requirement for each mobile electronic device issued shall be documented in a written justification that shall be maintained by the agency and reviewed annually. All State agency heads, in consultation with the Office of Information Technology Services and the Office of State Budget and Management, shall document and review all authorized cell phone, smart phone, and other mobile electronic communications device procurement, and related phone, data, Internet, and other usage plans for and by their employees. Agencies shall conduct periodic audits of mobile device usage to ensure that State employees and contractors are complying with agency policies and State requirements for their use.
Beginning October 1, 2012, each agency shall report annually to the Chairs of the House of Representatives Committee on Appropriations and the House of Representatives Subcommittee on General Government, the Chairs of the Senate Committee on Appropriations and the Senate Appropriations Committee on General Government and Information Technology, the Joint Legislative Oversight Committee on Information Technology, the Fiscal Research Division, and the Office of State Budget and Management on the following:
(1)	Any changes to agency policies on the use of mobile devices.
(2)	The number and types of new devices issued since the last report.
(3)	The total number of mobile devices issued by the agency.
(4)	The total cost of mobile devices issued by the agency.
(5)	The number of each type of mobile device issued, with the total cost for each type."

PLAN TO ENHANCE ENTERPRISE LEVEL BUSINESS INTELLIGENCE TO INCREASE EFFICIENCY IN STATE GOVERNMENT
SECTION 6A.8.(a)  Creation of Plan. – 
(1)	Creation of plan. – The State Controller shall create a plan (the plan) to establish an initiative (the initiative) to support the effective and efficient development of State agency business intelligence capability in a coordinated manner and reduce unnecessary information silos and technological barriers. The initiative shall not be intended to replace transactional systems, but shall instead be intended to leverage the data from those systems for enterprise‑level State business intelligence.
		The plan shall provide for a comprehensive evaluation of existing data analytics projects and plans in order to identify data integration and business intelligence opportunities that will generate greater efficiencies in, and improved service delivery by, State agencies.
(2)	Application to State governments. – The plan shall provide for the initiative to include all State agencies, departments, and institutions, including The University of North Carolina.
(3)	Governance. – The plan shall provide for the State Controller to lead the initiative and for the Chief Justice of the North Carolina Supreme Court and the Legislative Services Commission to each designate an officer or agency to advise and assist the State Controller with respect to implementation of the initiative in their respective branches of government. The plan shall require the judicial and legislative branches to fully cooperate in the initiative mandated by this section in the same manner as is required of State agencies.
SECTION 6A.8.(b)  Powers and Duties of State Controller. – The plan shall provide that the State Controller shall do all of the following:
(1)	Continue and coordinate ongoing enterprise data integration efforts, including:
a.	The deployment, support, and technology improvements for CJLEADS.
b.	The pilot and subsequent phase initiative for NC FACTS.
c.	Other capabilities developed as part of the initiative.
(2)	Identify technologies currently used in North Carolina that have the capability to support the initiative.
(3)	Identify other technologies, especially those with unique capabilities, that could support the State's business intelligence effort.
(4)	Compare capabilities and costs across State agencies.
(5)	Ensure implementation is properly supported across State agencies.
(6)	Ensure that data integration and sharing is performed in a manner that preserves data privacy and security in transferring, storing, and accessing data, as appropriate.
(7)	Identify any waivers and written agreements that may be required by State or federal law to effectuate data sharing and to carry out the purposes of this section.
(8)	Plan coordination of data requirements and usage for State business intelligence applications in a manner that (i) limits impacts on participating State agencies as those agencies provide data and business knowledge expertise and (ii) assists in defining business rules so the data can be properly used.
(9)	Recommend the most cost‑effective and reliable long‑term hosting solution for enterprise‑level State business intelligence as well as data integration, notwithstanding Section 6A.2(f) of S.L. 2011‑145.
SECTION 6A.8.(c)  Plan for Implementation of the Enterprise‑Level Business Intelligence Initiative. –
(1)	Phases of the initiative. – The plan shall provide for the initiative to be phased in accordance with this subsection and for the initiative to cycle through these phases on an ongoing basis:
a.	Phase I requirements. – In the first phase, the State Controller shall do the following:
1.	Inventory existing State agency business intelligence projects, both completed and under development.
2.	Develop a plan of action that does all of the following:
I.	Defines the program requirements, objectives, and end state of the initiative.
II.	Prioritizes projects and stages of implementation in a detailed plan and benchmarked time line.
III.	Includes the effective coordination of all of the State's current data integration initiatives.
IV.	Utilizes a common approach that establishes standards for business intelligence initiatives for all State agencies and prevents the development of projects that do not meet the established standards.
V.	Determines costs associated with the development effort and identifies potential sources of funding.
VI.	Includes a privacy framework for business intelligence consisting of adequate access controls and end user security requirements.
VII.	Estimates expected savings.
3.	Inventory existing external data sources that are purchased by State agencies to determine if consolidation of licenses is appropriate for the enterprise.
4.	Determine if current, ongoing projects support the enterprise level objectives.
5.	Determine if current applications are scalable, or are applicable for multiple State agencies, or both.
b.	Phase II requirements. – In the second phase, the State Controller shall do the following:
1.	Identify redundancies and determine which projects should be discontinued.
2.	Determine where gaps exist in current or potential capabilities.
(2)	Commencement of projects. – The plan shall set forth a date by which the State Controller shall begin projects to carry out the purposes of this section, subject to the availability of funds, and subsequent to the submission of the written report referred to in subsection (e) of this section. The plan shall also identify mechanisms for the State Controller to expand existing data integration or business intelligence contracts with current data integration efforts, as appropriate, in order to implement the plan required by this section in accordance with the schedule established and the priorities developed during Phase I of the initiative, and to use public‑private partnerships as appropriate to implement the plan.
(3)	State Controller's powers and duties with respect to projects. – With respect to any project that may be created, incorporated, consolidated, or eliminated as part of the initiative, the plan shall provide that the State Controller shall stand in the stead of the State Chief Information Officer and shall have all the powers and duties with respect to those projects that the State Chief Information Officer would otherwise enjoy, notwithstanding any other provision of law. The plan shall also provide that G.S. 147‑33.72E shall not apply to any project created, incorporated, consolidated, or eliminated as part of the initiative.
SECTION 6A.8.(d)  Use of Savings. – The plan shall provide that savings resulting from the cancellation of projects, software, and licensing, as well as any other savings from the initiative, be returned to the General Fund and remain unexpended and unencumbered until appropriated by the General Assembly in a subsequent fiscal year. The plan shall state that it is the intent of the General Assembly that expansion of the initiative in subsequent fiscal years be funded with these savings and that the General Assembly appropriate funds for projects in accordance with the priorities identified by Office of the State Controller in Phase I of the initiative.
SECTION 6A.8.(e)  Reporting. – By no later than January 1, 2013, the Office of the State Controller shall submit and present a written report on the plan developed pursuant to this section to the Chairs of the House of Representatives Appropriations and Senate Base Budget/Appropriations Committees, to the Joint Legislative Oversight Committee on Information Technology, and to the Fiscal Research Division of the General Assembly. The report required by this subsection shall include any necessary changes to the General Statutes.
SECTION 6A.8.(f)  Duties of State Agencies. – The plan shall require that the head of each State agency do all of the following:
(1)	Grant the Office of the State Controller access to all information required to develop and support State business intelligence applications pursuant to this section. The State Controller shall take all necessary action and precautions, including training, certifications, background checks, and governance policy and procedure to ensure the security, integrity, and privacy of the data in accordance with State and federal law and as may be required by contract.
(2)	Provide complete information on the State agency's information technology, operational, and security requirements.
(3)	Provide information on all of the State agency's information technology activities relevant to State business intelligence effort.
(4)	Forecast the State agency's projected future business intelligence information technology needs and capabilities.
(5)	Ensure that the State agency's future information technology initiatives coordinate efforts with the State Controller to include planning and development of data interfaces to incorporate data into the initiative and to ensure the ability to leverage analytics capabilities.
(6)	Provide technical and business resources to participate in the initiative by providing, upon request and in a timely and responsive manner, complete and accurate data, business rules and policies, and support.
(7)	Identify potential resources for deploying business intelligence in their respective State agencies and as part of the enterprise‑level effort.
(8)	Identify any waivers and written agreements that may be required by State or federal law in order to effectuate data sharing and otherwise implement the plan.
SECTION 6A.8.(g)  Miscellaneous Provisions. – 
(1)	Status with respect to certain information. – The plan shall provide that the State Controller shall be deemed to be all of the following for the purposes of this section:
a.	With respect to criminal information, and to the extent allowed by federal law, a criminal justice agency (CJA), as defined under Criminal Justice Information Services (CJIS) Security Policy. The State CJIS Systems Agency (CSA) shall ensure that CJLEADS receives access to federal criminal information deemed to be essential in managing CJLEADS to support criminal justice professionals.
b.	With respect to health information covered under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended, and to the extent allowed by federal law:
1.	A business associate with access to protected health information acting on behalf of the State's covered entities in support of data integration, analysis, and business intelligence.
2.	Authorized to access and view individually identifiable health information, provided that the access is essential to the enterprise fraud, waste, and improper payment detection program or required for future initiatives having specific definable need for the data.
c.	Authorized to access all State and federal data, including revenue and labor information, deemed to be essential to the enterprise fraud, waste, and improper payment detection program or future initiatives having specific definable need for the data.
d.	Authorized to develop agreements with the federal government to access data deemed to be essential to the enterprise fraud, waste, and improper payment detection program or future initiatives having specific definable need for such data.
(2)	Release of information. – The plans shall include a provision that the following limitations apply to (i) the release of information compiled as part of the initiative, (ii) data from State agencies that is incorporated into the initiative, and (iii) data released as part of the implementation of the initiative:
a.	Information compiled as part of the initiative. – Notwithstanding the   provisions of Chapter 132 of the General Statutes, information compiled by the State Controller related to initiative may be released as a public record only if the State Controller, in that officer's sole discretion, finds that the release of information is in the best interest of the general public and is not in violation of law or contract.
b.	Data from State agencies. – Any data that is not classified as a public record under G.S. 132‑1 shall not be deemed a public record when incorporated into the data resources comprising the initiative. To maintain confidentiality requirements attached to the information provided to the State Controller, each source agency providing data shall be the sole custodian of the data for the purpose of any request for inspection or copies of the data under Chapter 132 of the General Statutes.
c.	Data released as part of implementation. – Information released to persons engaged in implementing the State's business intelligence strategy under this section that is used for purposes other than official State business is not a public record pursuant to Chapter 132 of the General Statutes.

State Private Cloud
SECTION 6A.9.(a)  Findings. – The General Assembly finds that:
(1)	The wide distribution of information technology facilities across multiple locations causes infrastructure and operational inefficiencies.
(2)	Infrastructure as a service, also known as cloud computing, has the potential to increase efficiency and enhance operations by reducing information technology costs and accelerating the provision of services.
(3)	The creation of a secure and flexible State private cloud is in the best interest of the people of this State.
SECTION 6A.9.(b)  Plan Required. – The State Chief Information Officer shall create a plan for the development and implementation of a State‑owned, State‑hosted infrastructure as a service, or private cloud, project to be operated and managed by the State.
SECTION 6A.9.(c)  Components of the Plan. – The State private cloud plan created pursuant to this section shall include:
(1)	Requirements for:
a.	The State to have complete control and ownership of all components of the private cloud, including hardware, software, network infrastructure, security, and data.
b.	All components of the private cloud to be maintained at State‑owned, State‑operated facilities.
c.	The private cloud to fully comply with all legislative, regulatory, policy, and security requirements that apply to State agencies and entities conducting business with the State.
d.	The State's existing information technology infrastructure to be used to support the private cloud.
e.	Documentation of any redundancy built into the infrastructure to support requirements for increased availability and disaster recovery.
f.	A service‑centric approach to computing resources. Users of computing resources shall be able to efficiently access powerful, predefined computing environments based on their requirements.
g.	A self‑service ability to provision and de‑provision, as requested by users, while maintaining high levels of security.
h.	A fully functional, efficient, fair system to bill State agencies for private cloud usage. This requirement includes mechanisms to capture usage data and enable chargeback integration within the billing system.
i.	A plan to manage infrastructure resources that can be scaled in response to State agency requirements.
(2)	A detailed time line, documentation of agency requirements, identification and resolution of security issues, and an assessment of the impact on any ongoing projects or current applications.
(3)	Identification of costs associated with developing the private cloud.
(4)	Identification and documentation of private cloud management and monitoring tools to facilitate the maintenance of complete control of private cloud resources; automate provisioning, de‑provisioning, scheduling; and maintain system capacity.
(5)	Identification of ways to improve the private cloud's supporting infrastructure.
(6)	Identification of potential sources of savings to support development, implementation, and maintenance of the State private cloud.
SECTION 6A.9.(d)  Funding and Implementation. – No funds from any source shall be used for the development and implementation of a private cloud without specific authorization by the General Assembly appropriating funds for this purpose.
SECTION 6A.9.(e)  Report. – The State Chief Information Officer shall report the plan created pursuant to this section to the Joint Legislative Oversight Committee on Information Technology no later than January 1, 2013.
SECTION 6A.9.(f)  Access by Private Vendors. – If the State Chief Information Officer provides to a potential vendor any information or access to State facilities in connection with or anticipation of the private cloud project described in this section, the State Chief Information Officer shall provide the same information or access to all potential vendors that request it. The State Chief Information Officer shall certify the Officer's compliance with this subsection to the General Assembly.

STATE INFORMATION TECHNOLOGY CONSOLIDATION
SECTION 6A.10.  Section 6A.7(b) of S.L. 2011‑145 reads as rewritten:
"SECTION 6A.7.(b)  Beginning July 1, 2011, the State CIO shall plan and implement an enterprise level grants management system. Similar systems currently under development may be suspended by the State CIO with funding reprogrammed to support development of the enterprise level grants management system. The State Controller shall be the business owner of the enterprise grants management system and shall coordinate service and technical support with participating agencies.
In coordination with the State CIO, the Department of Health and Human Services shall develop a plan to implement a single case management system throughout that Department, beginning in the 2012‑2013 fiscal year, and shall report to the Joint Legislative Oversight Committee on Information Technology by February 1, 2012, on its initiatives to implement the system. The report shall include a detailed time line for completion and an explanation of the costs associated with case management consolidation."

appointment of the state chief information officer
SECTION 6A.11.(a)  G.S. 147‑33.76(a) reads as rewritten:
"(a)	The Office of Information Technology Services shall be managed and administered by the State Chief Information Officer ("State CIO"). The State Chief Information Officer shall be qualified by education and experience for the office and shall be appointed by the Governor subject to confirmation by joint resolution of the General Assembly. The term of office of the State CIO shall be for five years; the first full term shall begin July 1, 2013.
The Governor shall submit the name of the person to be appointed, for confirmation by the General Assembly, to the President Pro Tempore of the Senate and the Speaker of the House of Representatives by May 1 of the year in which the State CIO is to be appointed. If the Governor does not submit the name by that date, the General Assembly shall appoint the State CIO by passage of an act making the appointment.
In case of death, incapacity, resignation, removal by the Governor for cause, or vacancy for any other reason in the office of the State CIO prior to the expiration of the term of office while the General Assembly is in session, the Governor shall submit the name of a successor to the President Pro Tempore of the Senate and the Speaker of the House of Representatives within four weeks after the vacancy occurs. If the Governor does not do so, the General Assembly shall appoint the successor by passage of an act making the appointment.
In case of death, incapacity, resignation, removal by the Governor for cause, or vacancy for any other reason in the office of the State CIO prior to the expiration of the term of office while the General Assembly is not in session, the Governor shall appoint a State CIO to serve on an interim basis pending confirmation by the General Assembly."
SECTION 6A.11.(b)  This section becomes effective February 1, 2013.

PART VII. Public Schools

FUNDS FOR CHILDREN WITH DISABILITIES
SECTION 7.1.  The State Board of Education shall allocate additional funds for children with disabilities on the basis of three thousand seven hundred nine dollars ($3,709) per child. Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) twelve and five‑tenths percent (12.5%) of its 2012‑2013 allocated average daily membership in the local school administrative unit. The dollar amounts allocated under this section for children with disabilities shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve children with disabilities.

FUNDS FOR ACADEMICALLY GIFTED CHILDREN
SECTION 7.2.  The State Board of Education shall allocate additional funds for academically or intellectually gifted children on the basis of one thousand two hundred twenty‑three dollars and ninety‑nine cents ($1,223.99) per child for fiscal year 2012‑2013. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2012‑2013 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The dollar amounts allocated under this section for academically or intellectually gifted children shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.

school improvement plans at residential schools
SECTION 7.3.(a)  In order to improve student performance, the Eastern North Carolina School for the Deaf, the Governor Morehead School for the Blind, and the North Carolina School for the Deaf each shall develop a school improvement plan that takes into consideration the annual performance goal for that school that is set by the State Board of Education. The principal of each school, instructional personnel and residential life personnel assigned to that school, and a minimum of five parents of children enrolled in the school shall constitute a school improvement team to develop a school improvement plan to improve student performance.
Representatives of the instructional and residential life personnel shall be elected by their respective groups by secret ballot.
Parents shall be elected by parents of children enrolled in the school in an election conducted by the parent and teacher organization of the school or, if none exists, by the largest organization of parents formed for this purpose. To the extent possible, parents serving on school improvement teams shall reflect the composition of the students enrolled in that school. No more than two parents on the team may be employees of the school. Parental involvement is a critical component of school success and positive student achievement; therefore, it is the intent of the General Assembly that parents, along with instructional and residential life personnel, have a substantial role in developing school improvement plans. To this end, school improvement team meetings shall be held at a convenient time to assure substantial parent participation. Parents who are elected to serve on school improvement teams and who are not employees of the school shall receive travel and subsistence expenses in accordance with G.S. 138‑5 and, if appropriate, may receive a stipend.
All school improvement plans shall be, to the greatest extent possible, data driven. School improvement teams shall use the Education Value Added Assessment System (EVAAS), or a compatible and comparable system approved by the State Board of Education, to analyze student data to identify root causes for problems and to determine actions to address them. School improvement plans shall contain clear, unambiguous targets, explicit indicators and actual measures, and expeditious time frames for meeting the measurement standards.
SECTION 7.3.(b)  The strategies for improving student performance shall include the following:
(1)	A plan for the use of staff development funds that may be made available to the school to implement the school improvement plan. The plan may provide that a portion of these funds is used for mentor training and for release time and substitute teachers while teachers are meeting with mentors.
(2)	A plan for preparing students to read at grade level by the time they enter second grade. The plan shall require kindergarten and first grade teachers to notify parents or guardians when a child is not reading at grade level and is at risk of not reading at grade level by the time the child enters second grade. The plan may include the use of assessments to monitor students' progress in learning to read and strategies for teachers and parents to implement that will help students improve and expand their reading ability, as well as provide for the recognition of teachers and strategies that appear to be effective at preparing students to read at grade level.
(3)	A comprehensive plan to encourage parent involvement.
(4)	A plan designed to provide that the school is safe, secure, and orderly; that there is a climate of respect in the school; and that appropriate personal conduct is a priority for all students and all residential school personnel.
(5)	A plan that specifies the effective instructional practices and methods to be used to improve the academic performance of students identified as at risk of academic failure or at risk of dropping out of school.
SECTION 7.3.(c)  Support among affected staff members is essential to successful implementation of a school improvement plan to address improved student performance at that school. The principal of the school shall present the proposed school improvement plan to all of the instructional personnel assigned to the school for their review and vote. The vote shall be by secret ballot. The principal shall submit the school improvement plan to the State Board of Education only if the proposed school improvement plan has the approval of a majority of the instructional personnel who voted on the plan.
SECTION 7.3.(d)  The State Board of Education shall accept or reject the school improvement plan within 60 days after the submission plan. If the State Board rejects a school improvement plan, the State Board shall state with specificity the reasons for rejecting the plan to the principal and shall direct that the principal work with the school improvement team to resolve the disagreements. The school improvement team may then prepare another plan, present it to the instructional personnel assigned to the school for a vote, and submit it to the State Board to accept or reject. If there is no resolution within 30 days, then the State Board may develop a school improvement plan for the school; however, the General Assembly urges the State Board to utilize the school's proposed school improvement plan to the maximum extent possible when developing this plan.
SECTION 7.3.(e)  A school improvement plan shall remain in effect for no more than three years; however, the school improvement team may amend the plan as often as is necessary or appropriate. If, at any time, any part of a school improvement plan becomes unlawful or the State Board finds that a school improvement plan is impeding student performance at a school, the State Board may vacate the relevant portion of the plan and may direct the school to revise that portion. The procedures set out in this section shall apply to amendments and revisions to school improvement plans.
SECTION 7.3.(f)  Any funds the State Board makes available to a school to meet the goals for that school under the ABCs Program and to implement the school improvement plan at that school shall be used in accordance with those goals and the school improvement plan.
SECTION 7.3.(g)  The State Board shall develop a list of recommended strategies that it determines to be effective, which building‑level committees may use to establish parent involvement programs designed to meet the specific needs of their schools.
SECTION 7.3.(h)  Once the plan is developed, the principal shall ensure the plan is available and accessible to parents and the school community.

SCHOOL CALENDAR PILOT PROGRAM
SECTION 7.4.  The State Board of Education shall establish a school calendar pilot program in the Wilkes County Schools, the Montgomery County Schools, and the Stanly County Schools. The purpose of the pilot program is to determine whether and to what extent a local school administrative unit can save money during this extreme fiscal crisis by consolidating the school calendar.
Notwithstanding G.S. 115C‑84.2(a)(1), the school calendar for the 2012‑2013 calendar year for the pilot school systems shall include a minimum of 180 days or 1,000 hours of instruction covering at least nine calendar months.
If the local board of education in a pilot school system adds instructional hours to previously scheduled days under this section, the local school administrative unit is deemed to have a minimum of 180 days of instruction, and teachers employed for a 10‑month term are deemed to have been employed for the days being made up and shall be compensated as if they had worked the days being made up.
The State Board of Education shall report to the Joint Legislative Education Oversight Committee by March 15, 2013, on the administration of the pilot program, cost savings realized by it, and its impact on student achievement.

Restore Teaching Fellows Program
SECTION 7.5.  Section 1.38 of S.L. 2011‑266 is repealed.

Repeal Prohibition on Teacher Prepayment
SECTION 7.6.  Section 5 of S.L. 2011‑379 is repealed.

repeal increase in the number of instructional days
SECTION 7.7.(a)  G.S. 115C‑84.2 reads as rewritten:
"§ 115C‑84.2.  School calendar.
(a)	School Calendar. – Each local board of education shall adopt a school calendar consisting of 215 days all of which shall fall within the fiscal year. A school calendar shall include the following:
(1)	A minimum of180 days and 1,000 hours of instruction covering at least nine calendar months. The local board shall designate when the 180 instructional days shall occur. The number of instructional hours in an instructional day may vary according to local board policy and does not have to be uniform among the schools in the administrative unit. Local boards may approve school improvement plans that include days with varying amounts of instructional time. If school is closed early due to inclement weather, the day and the scheduled amount of instructional hours may count towards the required minimum to the extent allowed by State Board policy. The school calendar shall include a plan for making up days and instructional hours missed when schools are not opened due to inclement weather.
(1a)	Repealed by Session Laws 2004‑180, s. 1, effective August 9, 2004.
(2)	A minimum of 10 annual vacation leave days.
(3)	The same or an equivalent number of legal holidays occurring within the school calendar as those designated by the State Personnel Commission for State employees.
(4)	Repealed by Session Laws 2011‑145, s. 7.29(a), effective July 1, 2011.
(4a)	Five days, as designated by the local board, for use as teacher workdays. These days shall be protected to allow teachers to complete instructional and classroom administrative duties. The local school administrative unit shall not impose any additional tasks on these days. The local board shall schedule one of these days at the beginning of the school year and one at the end of each academic quarter.
(5)	The remaining days scheduled by the local board in consultation with each school's principal for use as teacher workdays, additional instructional days, or other lawful purposes. Before consulting with the local board, each principal shall work with the school improvement team to determine the days to be scheduled and the purposes for which they should be scheduled. Days may be scheduled and planned for different purposes for different personnel and there is no requirement to schedule the same dates for all personnel. In order to make up days for school closing because of inclement weather, the local board may designate any of the days in this subdivision as additional make‑up days to be scheduled after the last day of student attendance.
Local boards and individual schools are encouraged to use the calendar flexibility in order to meet the annual performance standards set by the State Board. Local boards of education shall consult with parents and the employed public school personnel in the development of the school calendar.
Local boards shall designate at least seven days scheduled under subdivisions (4a) and (5) of this subsection as days on which teachers may take accumulated vacation leave. Local boards may designate the remaining days scheduled in subdivisions (4a) and (5) of this subsection as days on which teachers may take accumulated vacation leave, but local boards shall give teachers at least 14 calendar days' notice before requiring a teacher to work instead of taking vacation leave on any of these days. A teacher may elect to waive this notice requirement for one or more of these days.
(b)	Limitations. – The following limitations apply when developing the school calendar:
(1)	The total number of teacher workdays for teachers employed for a 10 month term shall not exceed 195 days.
(2)	The calendar shall include at least 42 consecutive days when teacher attendance is not required unless: (i) the school is a year‑round school; or (ii) the teacher is employed for a term in excess of 10 months. At the request of the local board of education or of the principal of a school, a teacher may elect to work on one of the 42 days when teacher attendance is not required in lieu of another scheduled workday.
(3)	School shall not be held on Sundays.
(4)	Veterans Day shall be a holiday for all public school personnel and for all students enrolled in the public schools.
(c)	Emergency Conditions. – During any period of emergency in any section of the State where emergency conditions make it necessary, the State Board of Education may order general, and if necessary, extended recesses or adjournment of the public schools.
(d)	Opening and Closing Dates. – Local boards of education shall determine the dates of opening and closing the public schools under subdivision (a)(1) of this section. Except for year‑round schools, the opening date for students shall not be before August 25, and the closing date for students shall not be after June 10. On a showing of good cause, the State Board of Education may waive this requirement to the extent that school calendars are able to provide sufficient days to accommodate anticipated makeup days due to school closings. A local board may revise the scheduled closing date if necessary in order to comply with the minimum requirements for instructional days or instructional time. For purposes of this subsection, the term "good cause" means either that:
(1)	Schools in any local school administrative unit in a county have been closed eight days per year during any four of the last 10 years because of severe weather conditions, energy shortages, power failures, or other emergency situations; or
(2)	Schools in any local school administrative unit in a county have been closed for all or part of eight days per year during any four of the last 10 years because of severe weather conditions. For purposes of this subdivision, a school shall be deemed to be closed for part of a day if it is closed for two or more hours.
The State Board also may waive this requirement for an educational purpose. The term "educational purpose" means a local school administrative unit establishes a need to adopt a different calendar for (i) a specific school to accommodate a special program offered generally to the student body of that school, (ii) a school that primarily serves a special population of students, or (iii) a defined program within a school. The State Board may grant the waiver for an educational purpose for that specific school or defined program to the extent that the State Board finds that the educational purpose is reasonable, the accommodation is necessary to accomplish the educational purpose, and the request is not an attempt to circumvent the opening and closing dates set forth in this subsection. The waiver requests for educational purposes shall not be used to accommodate system‑wide class scheduling preferences.
The required opening and closing dates under this subsection shall not apply to any school that a local board designated as having a modified calendar for the 2003‑2004 school year or to any school that was part of a planned program in the 2003‑2004 school year for a system of modified calendar schools, so long as the school operates under a modified calendar.
(e)	Nothing in this section prohibits a local board of education from offering supplemental or additional educational programs or activities outside the calendar adopted under this section."
SECTION 7.7.(b)  G.S. 115C‑238.29F(d)(1) reads as rewritten:
"(1)	The school shall provide instruction each year for at least 180 days."
SECTION 7.7.(c)  G.S. 115C‑238.66(1)d. reads as rewritten:
"d.	The board of directors shall adopt a school calendar consisting of a minimum of 180 days of instruction covering at least nine calendar months."

RESIDENTIAL SCHOOLS
SECTION 7.8.(a)  Section 7.25(a) of S.L. 2011‑145 is repealed.
SECTION 7.8.(b)  The Department of Public Instruction shall not transfer any school‑based personnel from the residential schools to central office administrative positions.
SECTION 7.8.(c)  Notwithstanding G.S. 146‑30, the Department of Public Instruction shall retain all proceeds generated from the rental of building space on the residential school campuses. The Department of Public Instruction shall use all receipts generated from these leases to staff and operate the North Carolina School for the Deaf, the Eastern North Carolina School for the Deaf, and the Governor Morehead School. These receipts shall not be used to support administrative functions within the Department.

LIABILITY INSURANCE FOR PUBLIC SCHOOL PERSONNEL
SECTION 7.9.(a)  Within 60 days of the effective date of this section, the local school administrative units shall provide written notification to all public school employees regarding the coverage provided by the State‑funded liability insurance policy for North Carolina public school employees. Notification shall include information regarding policy coverage details, instructions on reporting claims, contact information for additional questions, and instructions on obtaining a copy of the policy.
SECTION 7.9.(b)  From the funds available for liability insurance for public school personnel, the Department of Public Instruction shall distribute additional funds to local school administrative units on the basis of average daily membership in order to implement the requirements of subsection (a) of this section.

pilot cooperative Innovative High School 
SECTION 7.10.  Notwithstanding G.S. 115C‑238.51, the State Board of Education shall approve the establishment of a cooperative innovative high school pilot by the local boards of education of the Davidson County Schools, Thomasville City Schools, and Lexington City Schools and the local board of trustees of Davidson County Community College under Part 9 of Article 16 of Chapter 115C of the General Statutes.  The pilot shall be known as the Yadkin Valley Regional Career Academy.

CLARIFYING COOPERATIVE INNOVATIVE HIGH SCHOOL STATUTES
SECTION 7.11.(a)  G.S. 115C‑238.50A reads as rewritten:
"§ 115C‑238.50A.  Definitions.
The following definitions apply in this Part:
(1)	Constituent institution. – A constituent institution as defined in G.S. 116‑2(4).
(1a)	Cooperative innovative high school. – A high school that meets the following criteria:
a.	It has no more than 100 students per grade level.
b.	It partners with an institution of higher education to enable students to concurrently obtain a high school diploma and begin or complete an associate degree program, master a certificate or vocational program, or earn up to two years of college credit within five years.
c.	It is located on the campus of the partner institution of higher education, unless the governing Board or the local board of trustees for a private North Carolina college specifically waives the requirement through adoption of a formal resolution.
(1b)	Cooperative innovative high school allotment. – Funds appropriated by the General Assembly to the Department of Public Instruction to provide additional resources to approved cooperative innovative high schools.
(2)	Education partner. – An education partner as provided in G.S. 115C‑238.52.
(3)	Governing Board. – The State Board of Community Colleges or the Board of Governors of The University of North Carolina.
(3a)	Local board of education. – A local board as defined in G.S. 115C‑5(5) or a regional school board of directors as defined in G.S. 115C‑238.61(5).
(4)	Local board of trustees. – The board of trustees of a community college, constituent institution of The University of North Carolina, or private college located in North Carolina.
(5)	Partner institution of higher education. – A community college, constituent institution of The University of North Carolina, or private college located in North Carolina."
SECTION 7.11.(b)  G.S. 115C‑238.51 reads as rewritten:
"§ 115C‑238.51.  Application process.
(a)	A local board of education and at least one local board of trustees shall jointly apply to establish a cooperative innovative high school program under this Part.
(b)	The application shall contain at least the following information:
(1)	A description of a program that implements the purposes in G.S. 115C‑238.50.
(2)	A statement of how the program relates to the Economic Vision Plan adopted for the economic development region in which the cooperative innovative high school is to be located.
(3)	The facilities to be used by the cooperative innovative high school and the manner in which administrative services of the school are to be provided.
(4)	A description of student academic and vocational achievement goals and the method of demonstrating that students have attained the skills and knowledge specified for those goals.
(5)	A description of how the cooperative innovative high school will be operated, including budgeting, curriculum, transportation, and operating procedures.
(6)	The process to be followed by the cooperative innovative high school to ensure parental involvement.
(7)	The process by which students will be selected for and admitted to the cooperative innovative high school.
(8)	A description of the funds that will be used and a proposed budget for the first five years of the implementation of the cooperative innovative high school. This description shall identify how the average daily membership (ADM) and full‑time equivalent (FTE) students are counted. If additional funds are requested, a description of how those additional funds will be used shall be submitted. Additional funds may include an allotment for a principal position, the cooperative innovative high school allotment, and tuition payments. For cooperative innovative high schools that have a community college as their partner institution of higher education, the proposed budget shall include the cost of including their students in calculations of budget full‑time equivalent students for the North Carolina Community College System.
(9)	The qualifications required for individuals employed in the cooperative innovative high school.
(10)	The number of students to be served.
(11)	A description of how the cooperative innovative high school's effectiveness in meeting the purposes in G.S. 115C‑238.50 will be measured.
(c)	The application shall be submitted to the State Board of Education and the applicable governing Board. If the partner institution of higher education is a private North Carolina college, the application shall be submitted solely to the State Board of Education.		"
SECTION 7.11.(c)  Part 9 of Article 16 of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑238.51A.  Approval process.
(a)	Joint Advisory Committee. – The State Board of Education and the applicable governing Board of the local board of trustees shall appoint a joint advisory committee to review the applications and to recommend approval for those applications that meet the requirements of this Part and achieve purposes set out in G.S. 115C‑238.50. The recommendation shall indicate whether additional funds were requested in the application.
(b)	No Additional Funds. – For applications which have not requested additional funds, the State Board of Education and the applicable governing Board may approve cooperative innovative high schools. Approvals shall be made by June 30 of each year. No additional State funds, position allotments, earning of budget full‑time equivalent students, or payments of tuition shall be provided to cooperative innovative high schools approved under this subsection.
(c)	Additional Funds. – For applications which have requested additional funds, the State Board of Education and the applicable governing Board may approve cooperative innovative high schools contingent upon appropriation of the additional funds by the General Assembly. Contingent approval shall be made by April 1 of each year. The contingent approval shall expire if no appropriation is made by the General Assembly for the additional funds within one calendar year. No cooperative innovative high school shall open prior to the appropriation by the General Assembly of the full amount of the additional funds as requested in the application for that school under G.S. 115C‑238.51 for the upcoming fiscal year or fiscal biennium, as appropriate."
SECTION 7.11.(d)  G.S. 115C‑238.52 reads as rewritten:
"§ 115C‑238.52. Participation by other education partners.
(a)	Any or all of the following education partners may participate in the development of a cooperative innovative high school under this Part that is targeted to high school students who would benefit from accelerated academic instruction:
(1),	(2)  Repealed by Session Laws 2005‑276, s. 7.33(a), effective July 1, 2005.
(3)	A private business or organization.
(4)	The county board of commissioners in the county in which the cooperative innovative high school is located.
(b)	Any or all of the education partners listed in subsection (a) of this section that participate shall:
(1)	Jointly apply with the local board of education and the local board of trustees to establish a cooperative innovative high school under this Part.
(2)	Be identified in the application.
(3)	Sign the written agreement under G.S. 115C‑238.53(b)."
SECTION 7.11.(e)  G.S. 115C‑238.53 reads as rewritten:
"§ 115C‑238.53. Operation of cooperative innovative high schools.
(a)	A cooperative innovative high school approved by the State is accountable to the local board of education.
(b)	A cooperative innovative high school approved under this Part shall operate under the terms of a written agreement signed by the local board of education, local board of trustees, State Board of Education, and applicable governing Board. The agreement shall incorporate the information provided in the application, as modified during the approval process, and any terms and conditions imposed on the school by the State Board of Education and the applicable governing Board. The agreement may be for a term of no longer than five school years.
(c)	A cooperative innovative high school may be operated in a facility owned or leased by the local board of education, the local board of trustees, or the education partner, if any.
(d)	A cooperative innovative high school approved under this Part shall provide instruction each school year for at least 185 days during nine calendar months, shall comply with laws and policies relating to the education of students with disabilities, and shall comply with Article 27 of this Chapter.
(e)	A cooperative innovative high school approved under this Part may use State, federal, and local funds allocated to the local school administrative unit, to the applicable governing Board, and to the partner institution of higher education to implement its program. If there is an education partner and if it is a public body, the cooperative innovative high school may use State, federal, and local funds allocated to that body.
(f)	Except as provided in this Part and under the terms of the agreement, cooperative innovative high schools:
(1)	Shall have the same exemptions from statutes and rules as charter schools operating under Part 6A of this Article, other than those pertaining to personnel.
(2)	May be exempted by the State Board of Education or by the applicable governing Board from laws and rules applicable to a local board of education, a local school administrative unit, a community college, a constituent institution, or a local board of trustees."
SECTION 7.11.(f)  G.S. 115C‑238.54 reads as rewritten:
"§ 115C‑238.54. Funds for cooperative innovative high schools.
(a)	The Department of Public Instruction shall assign a school code for each cooperative innovative high school that is approved under this Part. Notwithstanding G.S. 115C‑105.25, once the cooperative innovative high school has been assigned a school code, the local board of education may use these funds for the school and may transfer these funds between funding allotment categories.
(a1)	Repealed by Session Laws 2011‑145, s. 7.1A(j), effective January 1, 2012.
(b)	The local board of trustees may allocate State and federal funds for a cooperative innovative high school that is approved under this Part.
(c)	An education partner under G.S. 115C‑238.52 that is a public body may allocate State, federal, and local funds for a cooperative innovative high school that is approved under this Part.
(d)	If not an education partner under G.S. 115C‑238.52, a county board of commissioners in a county where a cooperative innovative high school is located may nevertheless appropriate funds to the school approved under this Part.
(e)	The local board of education and the local board of trustees are strongly encouraged to seek funds from sources other than State, federal, and local appropriations. They are strongly encouraged to seek funds the Education Cabinet identifies or obtains under G.S. 116C‑4.
(f)	Students in cooperative innovative high schools shall not be charged tuition for courses taken through the partner institution of higher education. 
(g)	Students in cooperative innovative high schools that have a community college as their partner institution of higher education and were approved under G.S. 115C‑238.51A(c) shall be included in calculations of budget full‑time equivalent students for the North Carolina Community College System. Students in cooperative innovative high schools that have a community college as their partner institution of higher education and were approved under G.S. 115C‑238.51A(b) shall not be included in calculations of budget full‑time equivalent students for the North Carolina Community College System. 
(h)	The State Board of Education shall reimburse The University of North Carolina for tuition for courses taken by students at cooperative innovative high schools that have a constituent institution of The University of North Carolina as their partner institution of higher education and were approved under G.S. 115C‑238.51A(c). Tuition payments shall not exceed the annual Board of Governors‑approved undergraduate resident tuition rate calculated on a per credit hour basis and shall not include fees. In addition, the cooperative innovative high school students' credit hours shall be nonfundable under The University of North Carolina Semester Credit Hour Enrollment Change Funding Model. The State Board of Education shall not reimburse The University of North Carolina for tuition for courses taken by students at cooperative innovative high schools that have a constituent institution of The University of North Carolina as their partner institution of higher education approved under G.S. 115C‑238.51A(b).
(i)	The State Board of Education shall reimburse private North Carolina colleges for tuition for courses taken by students at cooperative innovative high schools that have a private North Carolina college as their partner institution of higher education and were approved under G.S. 115C‑238.51A(c). Tuition payments shall not exceed the highest undergraduate resident rate approved by the Board of Governors for the University of North Carolina constituent institutions and shall not include fees. The State Board of Education shall not reimburse private North Carolina colleges for tuition for courses taken by students at cooperative innovative high schools that have a private North Carolina college as their partner institution of higher education and were approved under G.S. 115C‑238.51A(b)."
SECTION 7.11.(g)  G.S. 115C‑238.55 reads as rewritten:
"§ 115C‑238.55. Evaluation of cooperative innovative high schools.
The State Board of Education and the governing Boards shall evaluate the success of students in cooperative innovative high schools approved under this Part. Success shall be measured by high school retention rates, high school completion rates, high school dropout rates, certification and associate degree completion, admission to four‑year institutions, postgraduation employment in career or study‑related fields, and employer satisfaction of employees who participated in and graduated from the schools. The Boards shall jointly report by January 15 of each year to the Joint Legislative Education Oversight Committee on the evaluation of these schools."
SECTION 7.11.(h)  Section 7.21(e) of S.L. 2010‑31 is repealed.
SECTION 7.11.(i)  This section is effective when it becomes law. 

NORTH CAROLINA VIRTUAL PUBLIC SCHOOLS
SECTION 7.12.  Section 7.22(k) of S.L. 2011‑145 reads as rewritten:
"SECTION 7.22.(k)  The only funds that may be used for the instructional costs of NCVPS are the following:
(1)	Funds provided through the North Carolina Virtual Public Schools Allotment Formula.
(2)	Funds provided through the NCVPS enrollment reserve as set forth in this section.
(3)	Local funds.
(4)	Federal funds.
(5)	Special State Reserve Funds for Children and Youth with Disabilities.
(6)	ADM Contingency Reserve.

Repeal Obsolete Reports
SECTION 7.13.(a)  Section 7.19(d) of S.L. 2007‑323 is repealed.
SECTION 7.13.(b) Section 7.21 of S.L. 2007‑323 is repealed.
SECTION 7.13.(c)  G.S. 115C‑276(t) is repealed.
SECTION 7.13.(d)  Subsections (c) and (g) of Section 7.5 of S.L. 2010‑31 are repealed.
SECTION 7.13.(e)  Section 7.19(c) of S.L. 2010‑31 is repealed.
SECTION 7.13.(f)  G.S. 115C‑12(26) is repealed.

Teacher/Teacher Assistant Leave on Instructional Days.
SECTION 7.14.(a)  G.S. 115C‑302.1(c) reads as rewritten:
"(c)	Vacation. – Included within the 10‑month term shall be annual vacation leave at the same rate provided for State employees, computed at one‑twelfth of the annual rate for State employees for each month of employment. Local boards shall provide at least 10 days of annual vacation leave at a time when students are not scheduled to be in regular attendance. However, instructional personnel who do not require a substitute may use annual vacation leave on days that students are in attendance. Vocational and technical education teachers who are employed for 11 or 12 months may, with prior approval of the principal, work on annual vacation leave days designated in the school calendar and may use those annual vacation leave days during the eleventh or twelfth month of employment. Local boards of education may adopt policies permitting instructional personnel employed for 11 or 12 months in year‑round schools to, with the approval of the principal, take vacation leave at a time when students are in attendance; local funds shall be used to cover the cost of substitute teachers.
On a day that pupils are not required to attend school due to inclement weather, but employees are required to report for a workday, a teacher may elect not to report due to hazardous travel conditions and to take an annual vacation day or to make up the day at a time agreed upon by the teacher and the teacher's immediate supervisor or principal. On a day that school is closed to employees and pupils due to inclement weather, a teacher shall work on the scheduled makeup day.
All vacation leave taken by the teacher will be upon the authorization of the teacher's immediate supervisor and under policies established by the local board of education. Annual vacation leave shall not be used to extend the term of employment.
Notwithstanding any provisions of this subsection to the contrary, no person shall be entitled to pay for any vacation day not earned by that person."
SECTION 7.14.(b)  G.S. 115C‑316(a)(3) reads as rewritten:
"(3)	Notwithstanding any provisions of this section to the contrary no person shall be entitled to pay for any vacation day not earned by that person. The first 10 days of annual leave earned by a 10‑ or 11‑month employee during any fiscal year period shall be scheduled to be used in the school calendar adopted by the respective local boards of education. Vacation days shall not be used for extending the term of employment of individuals. Ten‑ or 11‑month employees may accumulate annual vacation leave days as follows: annual leave may be accumulated without any applicable maximum until June 30 of each year. On June 30 of each year, any of these employees with more than 30 days of accumulated leave shall have the excess accumulation converted to sick leave so that only 30 days are carried forward to July 1 of the same year. All vacation leave taken by these employees shall be upon the authorization of their immediate supervisor and under policies established by the local board of education. The policies may permit teacher assistants who require a substitute and are employed for 11 or 12 months in year‑round schools to take vacation leave at a time when students are in attendance; local funds shall be used to cover the cost of substitutes. Vacation leave for instructional personnel who do not require a substitute shall not be restricted to days that students are not in attendance. An employee shall be paid in a lump sum for accumulated annual leave not to exceed a maximum of 240 hours or 30 days when separated from service due to resignation, dismissal, reduction in force, death or service retirement. Upon separation from service due to service retirement, any annual vacation leave over 30 days will convert to sick leave and may be used for creditable service at retirement in accordance with G.S. 135‑4(e). If the last day of terminal leave falls on the last workday in the month, payment shall be made for the remaining nonworkdays in that month. Employees retiring on disability retirement may exhaust annual leave rather than be paid in a lump sum. The provisions of this subdivision shall be accomplished without additional State and local funds being appropriated for this purpose. The State Board of Education shall adopt rules and regulations for the administration of this subdivision."
SECTION 7.14.(c)  This section applies beginning with the 2012‑2013 school year.

PART VIII. Community Colleges

ACQUISITION OF REAL PROPERTY BY LEASE PURCHASE
SECTION 8.1.(a)  The catch line of G.S. 115D‑58.15 reads as rewritten:
"§ 115D‑58.15.  Lease purchase and installment purchase contracts for real and personal property."
SECTION 8.1.(b)  G.S. 115D‑58.15(a) reads as rewritten: 
"(a)	Authority. – Notwithstanding any provisions of law to the contrary, the board of trustees of a community college may use lease purchase or installment purchase contracts to purchase or finance the purchase of real and personal property as provided in this section. A college shall not have more than five State‑funded contracts in effect at any one time."
SECTION 8.1.(c)  G.S. 115D‑20(11) reads as rewritten:
"(11)	To enter into lease purchase and installment purchase contracts for real and personal property under G.S. 115D‑58.15."

CARRYFORWARD FOR EQUIPMENT
SECTION 8.2.  In accordance with G.S. 115D‑31, funds appropriated to the Community Colleges System Office for equipment for the 2011‑2012 fiscal year shall not revert at the end of the fiscal year but shall be made available to the Community Colleges System Office for equipment for the 2012‑2013 fiscal year.

REPEAL OBSOLETE REPORTS
SECTION 8.3.(a)  G.S. 115D‑5(o) reads as rewritten: 
"(o)	
All multicampus centers approved by the State Board of Community Colleges shall receive funding under the same formula. The State Board of Community Colleges shall not approve any additional multicampus centers without identified recurring sources of funding."
SECTION 8.3.(b)  G.S. 116D‑3(c) is repealed.
SECTION 8.3.(c)  Section 9.11(e) of S.L. 1999‑237 is repealed.
SECTION 8.3.(d)  Section 4 of S.L. 2005‑198, as amended by Section 35 of S.L. 2007‑484, is repealed.

REPEAL DUPLICATIVE AUDIT REQUIREMENT
SECTION 8.4.  G.S. 147‑64.6A is repealed.

UPDATE COLLEGE PERFORMANCE MEASURES
SECTION 8.5.  G.S. 115D‑31.3 reads as rewritten:
"§ 115D‑31.3.  Institutional performance accountability.
(a)	Creation of Accountability Measures and Performance Standards. – The State Board of Community Colleges shall create new accountability measures and performance standards for the Community College System. The State Board of Community Colleges shall review annually the accountability measures and performance standards to ensure that they are appropriate for use in recognition of successful institutional performance.
(b)	through (d) Repealed by Session Laws 2000‑67, s. 9.7, effective July 1, 2000.
(e)	Mandatory Performance Measures. – The State Board of Community Colleges shall evaluate each college on the following eight performance measures:
(1)	Progress of basic skills students. (2)	Passing rate for General Educational Development (GED) diploma examinations.(3)	Performance of students who transfer to a four‑year institution.
(4)	Success rates of developmental students in subsequent college‑level English courses.
(5)	Success rates of developmental students in subsequent college‑level math courses.
(5a)	Progress of first‑year curriculum students.
	
(7)	Curriculum student retention and graduation.
	
(9)	Passing rate for licensure and certification examinations.
The State Board may also evaluate each college on additional performance measures.
(f)	Publication of Performance Ratings. – Each college shall publish its performance on the eight measures set out in subsection (e) of this section (i) annually in its electronic catalog or on the Internet and (ii) in its printed catalog each time the catalog is reprinted.
The Community Colleges System Office shall publish the performance of all colleges on all eight measures.
(g)	Recognition for Successful Institutional Performance. – For the purpose of recognition for successful institutional performance, the State Board of Community Colleges shall evaluate each college on the eight performance measures. For each of these eight performance measures on which a college performs successfully, the college may retain and carry forward into the next fiscal year one‑fourth of one percent (¼ of 1%) of its final fiscal year General Fund appropriations. (h)	Recognition for Exceptional Institutional Performance. – Funds not allocated to colleges in accordance with subsection (g) of this section shall be used to reward exceptional institutional performance. A college is deemed to have achieved exceptional institutional performance if it succeeds on all eight performance measures. After all State aid budget obligations have been met, the State Board of Community Colleges shall distribute the remainder of these funds to colleges that achieve exceptional institutional performance status based on the pro rata share of total full time equivalent (FTE) students served at each college.
		
The State Board may withhold the portion of funds for which a college may qualify as an exceptional institution while the college is under investigation by a State or federal agency or if its performance does not meet the standards established by the Southern Association of Colleges and Schools, the State Auditor's Office, or the State Board of Community Colleges. The State Board may release the funds at such time as the investigations are complete and the issues are resolved.
(i)	Permissible Uses of Funds. – Funds retained by colleges or distributed to colleges pursuant to this section shall be used for the purchase of equipment, initial program start‑up costs including faculty salaries for the first year of a program, and one‑time faculty and staff bonuses. These funds shall not be used for continuing salary increases or for other obligations beyond the fiscal year into which they were carried forward. These funds shall be encumbered within 12 months of the fiscal year into which they were carried forward.
(j)	Use of funds in low‑wealth counties. – Funds retained by colleges or distributed to colleges pursuant to this section may be used to supplement local funding for maintenance of plant if the college does not receive maintenance of plant funds pursuant to G.S. 115D‑31.2, and if the county in which the main campus of the community college is located meets all of the following:
(1)	Is designated as a Tier 1 county in accordance with G.S. 143B‑437.08.
(2)	Had an unemployment rate of at least two percent (2%) above the State average or greater than seven percent (7%), whichever is higher, in the prior calendar year.
(3)	Is a county whose wealth, as calculated under the formula for distributing supplemental funding for schools in low‑wealth counties, is eighty percent (80%) or less of the State average.
Funds may be used for this purpose only after all local funds appropriated for maintenance of plant have been expended."

MODIFY INSTITUTIONAL PERFORMANCE ACCOUNTABILITY FOR ONE YEAR
SECTION 8.6.  Effective for the 2011‑2012 reporting year, and notwithstanding G.S. 115D‑31.3, the State Board of Community Colleges shall not require a college to report its performance on the progress of basic skills students as one of the mandatory performance standards prescribed by G.S. 115D‑31.3(e). A college shall not be evaluated on the progress of basic skills students for the purpose of recognizing successful institutional performance or exceptional institutional performance. For each of the remaining seven performance standards on which a college performs successfully, the college may retain and carry forward into the 2013‑2014 fiscal year two‑sevenths of one percent (2/7 of 1%) of its final fiscal year General Fund appropriations.

GATEWAY TO COLLEGE PILOT AT DURHAM TECHNICAL COMMUNITY COLLEGE
SECTION 8.7.(a)  Notwithstanding Section 7.1A of S.L. 2011‑145, as amended by Section 13 of S.L. 2011‑391, and any other provision of law, the State Board of Education and the State Board of Community Colleges shall approve the Gateway to College program at Durham Technical Community College as a Career and College pathway pilot program. This program concurrently provides high school and college education to high school students who have previously dropped out.
SECTION 8.7.(b)  The State Board of Community Colleges shall include curriculum coursework, including developmental course work, associated with this program when computing the budget FTE for Durham Technical Community College in the 2012‑2013 fiscal year.
SECTION 8.7.(c)  Durham Technical Community College shall report to the Education Appropriation Subcommittees of the House of Representatives and the Senate by March 1, 2013, on student outcomes under the program and on the actual cost of the program, including administrative expenses incurred by Durham Public Schools and Durham Technical Community College.

COMMUNITY COLLEGE TUITION WAIVER 
SECTION 8.8.  G.S. 115D‑5(b) reads as rewritten:
"(b)	In order to make instruction as accessible as possible to all citizens, the teaching of curricular courses and of noncurricular extension courses at convenient locations away from institution campuses as well as on campuses is authorized and shall be encouraged. A pro rata portion of the established regular tuition rate charged a full‑time student shall be charged a part‑time student taking any curriculum course. In lieu of any tuition charge, the State Board of Community Colleges shall establish a uniform registration fee, or a schedule of uniform registration fees, to be charged students enrolling in extension courses for which instruction is financed primarily from State funds. The State Board of Community Colleges may provide by general and uniform regulations for waiver of tuition and registration fees for the following:
(1)	Persons not enrolled in elementary or secondary schools taking courses leading to a high school diploma or equivalent certificate.
(2)	Courses requested by the following entities that support the organizations' training needs and are on a specialized course list approved by the State Board of Community Colleges:
a.	Volunteer fire departments.
b.	Municipal, county, or State fire departments.
c.	Volunteer EMS or rescue and lifesaving departments.
d.	Municipal, county, or State EMS or rescue and lifesaving departments.
d1.	Law enforcement, fire, EMS or rescue and lifesaving entities serving a lake authority that was created by a county board of commissioners prior to July 1, 2012.
e.	Radio Emergency Associated Communications Teams (REACT) under contract to a county as an emergency response agency.

f.	Municipal, county, or State law enforcement agencies.
g.	The Division of Adult Correction of the Department of Public Safety for the training of full‑time custodial employees and employees of the Division's Section of Community Corrections of the Division of Adult Correction required to be certified under Chapter 17C of the General Statutes and the rules of the Criminal Justice and Training Standards Commission.
h.	The Division of Juvenile Justice of the Department of Public Safety for the training of employees required to be certified under Chapter 17C of the General Statutes and the rules of the Criminal Justice and Training Standards Commission.
i.	The Eastern Band of Cherokee Indians law enforcement, fire, EMS or rescue and lifesaving tribal government departments or programs.
(3)	Repealed by Session Laws 2011‑145, s. 8.12(a), effective July 1, 2011.
(4)	Trainees enrolled in courses conducted under the Customized Training Program.
(5)	through (9) Repealed by Session Laws 2011‑145, s. 8.12(a), effective July 1, 2011.
(10)	Elementary and secondary school employees enrolled in courses in first aid or cardiopulmonary resuscitation (CPR).
(11)	Up to six hours of credit instruction and one course of noncredit instruction per academic semester for senior citizens age 65 or older who are qualified as legal residents of North Carolina.
(12)	All curriculum courses taken by high school students at community colleges, in accordance with G.S. 115D‑20(4) and this section.
(13)	Human resources development courses for any individual who (i) is unemployed; (ii) has received notification of a pending layoff; (iii) is working and is eligible for the Federal Earned Income Tax Credit (FEITC); or (iv) is working and earning wages at or below two hundred percent (200%) of the federal poverty guidelines.
(14)	Repealed by Session Laws 2011‑145, s. 8.12(a), effective July 1, 2011.
The State Board of Community Colleges shall not waive tuition and registration fees for other individuals."

INCREASE MAXIMUM PARKING FINE
SECTION 8.9.  G.S. 115D‑21 reads as rewritten:
"§ 115D‑21.  Traffic regulations; fines and penalties.
(a)	All of the provisions of Chapter 20 of the General Statutes relating to the use of highways of the State of North Carolina and the operation of motor vehicles thereon shall apply to the streets, roads, alleys and driveways on the campuses of all institutions in the North Carolina Community College System. Any person violating any of the provisions of Chapter 20 of the General Statutes in or on the streets, roads, alleys and driveways on the campuses of institutions in the North Carolina Community College System shall, upon conviction thereof, be punished as prescribed in this section and as provided by Chapter 20 of the General Statutes relating to motor vehicles. Nothing contained in this section shall be construed as in any way interfering with the ownership and control of the streets, roads, alleys and driveways on the campuses of institutions in the system as is now vested by law in the trustees of each individual institution in the North Carolina Community College System.
(b)	The trustees are authorized and empowered to make additional rules and regulations and to adopt additional ordinances with respect to the use of the streets, roads, alleys and driveways and to establish parking areas on or off the campuses not inconsistent with the provisions of Chapter 20 of the General Statutes of North Carolina. Upon investigation, the trustees may determine and fix speed limits on streets, roads, alleys, and driveways subject to such rules, regulations, and ordinances, lower than those provided in G.S. 20‑141. The trustees may make reasonable provisions for the towing or removal  of unattended vehicles found to be in violation of rules, regulations and ordinances. All rules, regulations and ordinances adopted pursuant to the authority of this section shall be recorded in the proceedings of the trustees; shall be printed; and copies of such rules, regulations and ordinances shall be filed in the office of the Secretary of State of North Carolina. Violation of any such rules, regulations, or ordinances, is an infraction punishable by a penalty of not more than one hundred dollars ($100.00).
Regardless of whether an institution does its own removal and disposal of motor vehicles or contracts with another person to do so, the institution shall provide a hearing procedure for the owner. For purposes of this subsection, the definitions in G.S. 20‑219.9 apply.
(1)	If the institution operates in such a way that the person who tows the vehicle is responsible for collecting towing fees, all provisions of Article 7A, Chapter 20, apply.
(2)	If the institution operates in such a way that it is responsible for collecting towing fees, it shall:
a.	Provide by contract or ordinance for a schedule of reasonable  towing fees,
b.	Provide a procedure for a prompt fair hearing to contest the towing,
c.	Provide for an appeal to district court from that hearing,
d.	Authorize release of the vehicle at any time after towing by the posting of a bond or paying of the fees due, and
e.	If the institution chooses to enforce its authority by sale of the vehicle, provide a sale procedure similar to that provided in G.S. 44A‑4, 44A‑5, and 44A‑6, except that no hearing in addition to the probable cause hearing is required. If no one purchases the vehicle at the sale and if the value of the vehicle is less than the amount of the lien, the institution may destroy it.
(c)	The trustees may by rules, regulations, or ordinances provide for a system of registration of all motor vehicles where the owner or operator does park on the campus or keeps said vehicle on the campus. The trustees shall cause to be posted at appropriate places on campus notice to the public of applicable parking and traffic rules, regulations, and ordinances governing the campus over which it has jurisdiction. The trustees may by rules, regulations, or ordinances establish or cause to have established a system of citations that may be issued to owners or operators of motor vehicles who violate established rules, regulations, or ordinances. The trustees shall provide for the administration of said system of citations; establish or cause to be established a system of fines to be levied for the violation of established rules, regulations and ordinances; and enforce or cause to be enforced the collection of said fines. The fine for each offense shall not exceed twenty‑five dollars ($25.00). The trustees shall be empowered to exercise the right to prohibit repeated violators of such rules, regulations, or ordinances from parking on the campus.
(d)	The clear proceeds of all civil penalties collected pursuant to this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."

GAston Multicampus
SECTION 8.10.  Notwithstanding G.S. 115D‑5(o), the State Board of Community Colleges shall approve the Kimbrell Campus multicampus site of Gaston College.

Financial Aid Program Administrative Costs
SECTION 8.11.(a)  Subsection (a) of Section 9.8 of S.L. 2011‑145, as amended by Section 2(b) of S.L. 2011‑340, reads as rewritten:
"SECTION 9.8.(a)  There is appropriated from the Escheat Fund income to the Board of Governors of The University of North Carolina the sum of forty‑nine million six hundred twenty‑two thousand two hundred forty‑two dollars ($49,622,242) for the 2011‑2012 fiscal year and the sum of  thirty two million two hundred eighty‑seven thousand two hundred forty‑two dollars ($32,287,242) for the 2012‑2013 fiscal year to be used for The University of North Carolina Need‑Based Financial Aid Program."
SECTION 8.11.(b)  Subsection (c) of Section 9.8 of S.L. 2011‑145 reads as rewritten:  
"SECTION 9.8.(c)  There is appropriated from the Escheat Fund income to the State Board of Community Colleges the sum of sixteen million five hundred thousand dollars ($16,500,000) for the 2011‑2012 fiscal year and the sum of sixteen million three hundred thirty‑five thousand dollars ($16,335,000) for the 2012‑2013 fiscal year to be used for community college grants."
SECTION 8.11.(c)  Of the funds appropriated by this act for the 2012‑2013 fiscal year to the Board of Governors of The University of North Carolina, the sum of one hundred sixty‑five thousand dollars ($165,000) shall be transferred to the State Board of Community Colleges to be used for Community College grants.  The General Assembly intends for this to be a permanent transfer, and in future fiscal years it shall be reflected in the budget of the State Board of Community Colleges.
SECTION 8.11.(d)  G.S. 115D‑40.1(c) reads as rewritten:
"(c)	Administration of Program. – The State Board shall adopt rules and policies for the disbursement of the financial assistance provided in subsections (a) and (b) of this section. Degree, diploma, and certificate students must complete a Free Application for Federal Student Aid (FAFSA) to be eligible for financial assistance. The State Board may contract with the State Education Assistance Authority for administration of these financial assistance funds. These funds shall not revert at the end of each fiscal year but shall remain available until expended for need‑based financial assistance. The interest earned on the funds provided in subsections (a) and (b) of this section may be used to support the costs of administering the Community College Grant Program. If the interest earnings are not adequate to support the administrative costs, up to one percent (1%) of funds provided in subsection (a) of this section may be used to support the costs of administering the Community College Grant Program."

PART IX. Universities

Study Tuition Cost for Veterans
SECTION 9.1.  The Joint Legislative Education Oversight Committee shall study the tuition costs for veterans who enroll in the State's community colleges or in any constituent institution of The University of North Carolina. As part of the study, the Committee shall consider the current criteria for determining whether a veteran qualifies for the resident tuition rate and how those criteria affect veterans who qualify for post‑9/11 GI Bill benefits, as well as other veterans. The Committee shall also consider the potential educational costs to the State of veterans who attend any of the State's public institutions of higher education at the resident tuition rate and ways to limit those costs. The Committee may consider any other issues relevant to the study.

Forgivable Education Loans for Service Program and Fund/Technical Corrections
SECTION 9.2.(a)  G.S. 116‑209.45(b)(1) reads as rewritten:
"(b)	Definitions. – The following definitions apply in this section:
(1)	Eligible Institution. – Notwithstanding G.S. 116‑201(b)(5) and G.S. 116‑201(b)(6) and for purposes of this section only, an institution of higher education that is any of the following:
a.	A postsecondary constituent institution of The University of North Carolina as defined in G.S. 116‑2(4).
b.	A community college as defined in G.S. 115D‑2(2).
			f.	Another public or nonprofit postsecondary institution offering a program of study not otherwise available in North Carolina that is deemed to be eligible under rules promulgated by the Authority.
g.	An eligible private postsecondary institution as defined in G.S. 116‑280(3)."
SECTION 9.2.(b)  Section 9.18(d) of S.L. 2011‑145 reads as rewritten:
"SECTION 9.18.(d)  The State Education Assistance Authority shall report no later than September 1, 2013, to the Joint Legislative Education Oversight Committee regarding the implementation of this section. The report shall contain, for the 2012‑2013 academic year, the amount of scholarship and grant money disbursed, the number of students eligible for the funds, the number of eligible students receiving the funds, and a breakdown of the eligible private postsecondary institutions that received the funds."
SECTION 9.2.(c)  Section 9.18(i) of S.L. 2011‑145 reads as rewritten:
"SECTION 9.18.(i)  Subsections (a), (d), and (i) of this section become effective July 1, 2011. Article 34 of Chapter 116 of the General Statutes, as enacted by subsection (a) of this section, applies to the 2012‑2013 academic year and each subsequent academic year, except that the rule‑making authority for the State Education Assistance Authority under G.S. 116‑283(a) becomes effective immediately on July 1, 2011. Subsections (b), (c), (e), (f), (g), and (h) of this section become effective July 1, 2012, except that the State Education Assistance Authority may continue to make payments pursuant to G.S. 116‑43.5 until August 1, 2012, to students who attended certain private institutions of higher education in the 2011‑2012 academic year."

Eliminate In‑State Tuition Status for Out‑of‑State Full Scholarship Students
SECTION 9.3.(a)  G.S. 116‑143.6 is repealed.
SECTION 9.3.(b)  This section applies to the 2012‑2013 fall academic semester and each subsequent academic semester.

UNC/Repeal Obsolete or Redundant Reporting Requirements
SECTION 9.4.(a)  G.S. 116‑11(10a) reads as rewritten:
"(10a)	The Board of Governors, the State Board of Community Colleges, and the State Board of Education, in consultation with nonprofit postsecondary educational institutions shall plan a system to provide an exchange of information among the public schools and institutions of higher education to be implemented no later than June 30, 1995. As used in this section, "institutions of higher education" shall mean (i) public higher education institutions defined in G.S. 116‑143.1(a)(3), and (ii) those nonprofit postsecondary educational institutions as described in G.S. 116‑280 that choose to participate in the information exchange. The information shall include:
a.	The number of high school graduates who apply to, are admitted to, and enroll in institutions of higher education;
b.	College performance of high school graduates for the year immediately following high school graduation including each student's: need for remedial coursework at the institution of higher education that the student attends; performance in standard freshmen courses; and continued enrollment in a subsequent year in the same or another institution of higher education in the State;
c.	The progress of students from one institution of higher education to another; and
d.	Consistent and uniform public school course information including course code, name, and description.
The Department of Public Instruction shall generate and the local school administrative units shall use standardized transcripts in an automated format for applicants to higher education institutions. The standardized transcript shall include grade point average, class rank, end‑of‑course test scores, and uniform course information including course code, name, units earned toward graduation, and credits earned for admission from an institution of higher education. The grade point average and class rank shall be calculated by a standard method to be devised by the institutions of higher education.
"
SECTION 9.4.(b)  G.S. 116‑11(12a) reads as rewritten:
"(12a)	The Board of Governors of The University of North Carolina shall implement, administer, and revise programs for meaningful professional development for professional public school employees based upon the evaluations and recommendations made by the State Board of Education under G.S. 115C‑12(26). The programs shall be aligned with State education goals and directed toward improving student academic achievement."
SECTION 9.4.(c)  G.S. 116D‑3(a)(1) is repealed.  
SECTION 9.4.(d)  Section 7 of S.L. 1989‑936, as amended by S.L. 1991‑346, reads as rewritten:
"Sec. 7. The Board of Governors of The University of North Carolina shall adopt standards to create and enhance an organized program of public service and technical assistance to the public schools. This program shall:
(1)	Provide systematic access for public schools to consultation and advice available from members of the faculties of the constituent institutions;
(2)	Facilitate and encourage research in the public schools and the application of the results of this research;
(3)	Link the education faculties of the constituent institutions with public school teachers and administrators through public service requirements for the education faculties; and
(4)	Create partnerships among all constituent institutions, their schools or departments of education, and the maximum number of public schools that could benefit from these partnerships.
"
SECTION 9.4.(e)  Section 1.1 of S.L. 2000‑3 reads as rewritten:
"Section 1.1. The General Assembly finds that although The University of North Carolina is one of the State's most valuable assets, the current facilities of the University have been allowed to deteriorate due to decades of neglect and have unfortunately fallen into a state of disrepair because of inadequate attention to maintenance. It is the intent of the General Assembly to reverse this trend and to provide a mechanism to assure that the University's capital assets are adequately maintained. The General Assembly commits to responsible stewardship of these assets to protect their value over the years, as follows:
(1)	The Board of Governors of The University of North Carolina shall require each constituent and affiliated institution to monitor the condition of its facilities and their needs or repair and renovation, and to assure that all necessary maintenance is carried out within funds available.
	(3)	It is the intent of the General Assembly to assure that adequate oversight, funding, and accountability are continually provided so that the capital facilities of the University are properly maintained to preserve the level of excellence the citizens of this State deserve. To this end, the Joint Legislative Education Oversight Committee shall report to the General Assembly annually its recommendations for legislative changes to implement this policy."
SECTION 9.4.(f)  Section 6 of S.L. 2000‑3 reads as rewritten:
"Section 6. Repair and Renovation Reports. – 
The Board of Governors of The University of North Carolina shall also study the repairs and renovations formula currently utilized with respect to funding for the Repairs and Renovations Reserve Account to determine whether it adequately takes into account all of the appropriate maintenance needs of each constituent and affiliated institution, and shall recommend to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Education Oversight Committee any changes necessary to improve the formula. The Board shall make recommendations on the scope and adequacy of the methodology used to calculate the funding for the repairs and renovations reserve as specified in G.S. 143‑15.2."
SECTION 9.4.(g)  Section 13 of S.L. 2001‑496 is repealed.

NC Graduates In Primary Care Centers/Change Report Date
SECTION 9.5.  G.S. 143‑613(d) reads as rewritten:
"(d)	The progress of the private and State‑operated medical schools and State‑operated health professional schools towards increasing the number and proportion of graduates entering primary care shall be monitored annually by the Board of Governors of The University of North Carolina. Monitoring data shall include (i) the entry of State‑supported graduates into primary care residencies and clinical training programs, and (ii) the specialty practices by a physician and each midlevel provider who were State‑supported graduates as of a date five years after graduation. The Board of Governors shall certify data on graduates, their residencies and clinical training programs, and subsequent careers by November 15 of each calendar year, beginning in November of 2011, to the Fiscal Research Division of the Legislative Services Office and to the Joint Legislative Education Oversight Committee."

UNC Report on Endowment Funds
SECTION 9.6.  Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑36.7.  Report on endowment funds of The University of North Carolina.
The Board of Governors shall report to the Joint Legislative Committee on Governmental Operations and to the Fiscal Research Division beginning November 1, 2011, and annually thereafter, regarding the endowment funds held by each special responsibility constituent institution, the University of North Carolina Health Care System, and any other entity of The University, including those endowments held for the benefit of The University as a whole. The report shall provide an accounting of the amounts, uses, and public purposes of each endowment fund and shall also include all of the following information (disaggregated by types of institution) for each endowment fund:
(1)	The average and range of (i) the outstanding balance of each endowment and (ii) the growth of each endowment over the last 20 years.
(2)	The amount and percentage of endowment assets distributed on an annual basis.
(3)	The amount and percentage of endowment assets distributed on an annual basis for financial aid or for the purpose of reducing the costs of tuition, fees, textbooks, and room and board.
(4)	The extent to which the funds in each endowment are restricted and the restrictions placed upon such funds."

PERMANENT TRANSFER OF FUNDING FOR MILITARY ONE‑STOP & BRAC OUTREACH
SECTION 9.7.  The Military One‑Stop & BRAC Outreach program previously vested in Fayetteville State University is transferred to The University of North Carolina General Administration with all of the elements of a Type I transfer as defined in G.S. 143A‑6. The program transfer shall include the sum of two hundred fifty‑one thousand five hundred dollars ($251,500).

Study UNC Tuition Surcharge
SECTION 9.8.  The Fiscal Research Division, in cooperation with The University of North Carolina, shall study the tuition surcharge mandated by G.S. 116‑143.7.   As part of the study, the Fiscal Research Division shall examine the surcharge's effect, if any, on the number of credit hours taken by students at constituent institutions of The University of North Carolina and the resulting effect on the timely achievement of graduation; the number of students subject to the surcharge in each of the last five academic years; and the revenue generated by the surcharge.  In its study, the Fiscal Research Division shall also examine the methods that The University of North Carolina employs to provide notice to a student that the student is approaching the credit hour limit and will be charged the tuition surcharge if the student exceeds that limit.
	The Fiscal Research Division shall report its findings and recommendations, including any legislative recommendations, by January 1, 2013, to the Joint Legislative Education Oversight Committee and to the Education Appropriation Subcommittees of the House of Representatives and the Senate.

PART X. Department of Health and Human Services

NC Pre‑K
SECTION 10.1.(a)  The Division of Child Development and Early Education shall require the NC Pre‑K contractor to issue multiple‑year contracts for licensed private child care centers providing NC Pre‑K classrooms.
SECTION 10.1.(b)  The Division of Child Development and Early Education (Division) shall create a pilot program that provides funding for NC Pre‑K classrooms on a per classroom basis. The pilot program shall include three different NC Pre‑K contractual regions that are geographically diverse. The local NC Pre‑K administrator shall contract with the provider for operation of a classroom established pursuant to the pilot program. The Division shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations/Base Budget Committee on Health and Human Services, and the Fiscal Research Division on the pilot program no later than January 31, 2013.  The report shall include the following:
(1)	The number of students served.
(2)	The amount of funds paid for each classroom.
(3)	The amount of funds paid per student.
(4)	The attendance information on students in the pilot program as compared to those students in a classroom having a traditional funding structure.
(5)	Information on the number of students and students' families using the Subsidized Early Education for Kids (SEEK) system.
(6)	A cost comparison of the classroom pilots to the average cost per student through the per student funding methodology.
SECTION 10.1.(c)  The Division of Child Development and Early Education (DCDEE) shall continue the implementation of the NC Pre‑K program. The  NC Pre‑K shall serve children who reach the age of four on or before August 31 of that school year and who meet eligibility criteria.
SECTION 10.1.(d)  Other than developmental disabilities or other chronic health issues, the Division of Child Development and Early Education shall not consider the health of a child as a factor in determining eligibility for participation in the NC Pre‑K program.
SECTION 10.1.(e)  All entities operating NC Pre‑K classrooms shall adhere to all of the policies prescribed by the Division of Child Development and Early Education regarding programmatic standards and classroom requirements.
SECTION 10.1.(f)  The Division of Child Development and Early Education shall establish a standard decision‑making process to be used by local NC Pre‑K committees in awarding NC Pre‑K classroom slots and student selection.
SECTION 10.1.(g)  The Division of Child Development and Early Education shall submit an annual report no later than March 15 of each year to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Oversight Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Office of State Budget and Management, and the Fiscal Research Division. The report shall include the following:
(1)	The number of children participating in the NC Pre‑K program.
(2)	The number of children participating in the NC Pre‑K program who have never been served in other early education programs, such as child care, public or private preschool, Head Start, Early Head Start, or early intervention programs.
(3)	The expected NC Pre‑K expenditures for the programs and the source of the local contributions.
(4)	The results of an annual evaluation of the NC Pre‑K program.

Revise Child Care Subsidy Rates Provision
SECTION 10.2.  Section 10.1 of S.L. 2011‑145 is amended by adding the following new subsection to read:
"SECTION 10.1.(g1)  The Department of Health and Human Services, Division of Child Development and Early Education, shall require all county departments of social services to include on any forms used to determine eligibility for child care subsidy whether the family waiting for subsidy is receiving assistance through the NC Pre‑K program or Head Start."

Early Childhood Education and Development Initiatives Enhancements/Salary Schedule/Match Requirement Adjustments
SECTION 10.3.(a)  Section 10.5(c) of S.L. 2011‑145 is repealed.
SECTION 10.3.(b)  Section 10.5 of S.L. 2011‑145 is amended by adding the following new subsection to read:
"SECTION 10.5.(c1)  The North Carolina Partnership for Children, Inc., shall develop and implement a salary schedule for the Executive Director of the North Carolina Partnership for Children, Inc., and the directors of local partnerships. The salary schedule shall set the maximum amount of State funds that may be used for the salary of the Executive Director of the North Carolina Partnership for Children, Inc., and the directors of the local partnerships. In establishing a salary schedule, the North Carolina Partnership for Children, Inc., shall base the schedule on the following criteria:
(1)	The population of the area serviced by a local partnership.
(2)	The amount of State funds administered by the North Carolina Partnership for Children, Inc.
(3)	The amount of total funds administered by the North Carolina Partnership for Children, Inc.
(4)	The professional experience of the individual to be compensated.
(5)	Any other relevant factors pertaining to salary, as determined by the North Carolina Partnership for Children, Inc.
The salary schedule shall be used only to determine the maximum amount of State funds that may be used for compensation. Nothing in this subsection shall be construed to prohibit a local partnership from using non‑State funds to supplement an individual's salary in excess of the amount set by the salary schedule established under this subsection."
SECTION 10.3.(c)  Section 10.5(e) of S.L. 2011‑145, as amended by Section 21A of S.L. 2011‑391, reads as rewritten:
"SECTION 10.5.(e)  The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match one hundred percent (100%) of the total amount budgeted for the program in each fiscal year of the biennium. Of the funds the North Carolina Partnership for Children, Inc., and the local partnerships are required to match, contributions of cash shall equal to at least ten percent (10%) and in‑kind donated resources equal to no more than three percent (3%) for a total match requirement of thirteen percent (13%) for each fiscal year. The North Carolina Partnership for Children, Inc., may carry forward any amount in excess of the required match for a fiscal year in order to meet the match requirement of the succeeding fiscal year. Only in‑kind contributions that are quantifiable shall be applied to the in‑kind match requirement. Volunteer services may be treated as an in‑kind contribution for the purpose of the match requirement of this subsection. Volunteer services that qualify as professional services shall be valued at the fair market value of those services. All other volunteer service hours shall be valued at the statewide average wage rate as calculated from data compiled by the Employment Security Commission in the Employment and Wages in North Carolina Annual Report for the most recent period for which data are available. Expenses, including both those paid by cash and in‑kind contributions, incurred by other participating non‑State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships, also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:
(1)	Be verifiable from the contractor's records.
(2)	If in‑kind, other than volunteer services, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations.
(3)	Not include expenses funded by State funds.
(4)	Be supplemental to and not supplant preexisting resources for related program activities.
(5)	Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives.
(6)	Be otherwise allowable under federal or State law.
(7)	Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership.
(8)	Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.
Failure to obtain a thirteen percent (13%) match by June 30 of each fiscal year shall result in a dollar‑for‑dollar reduction in the appropriation for the Program for a subsequent fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in‑kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly."

"Read NC" Early Literacy Initiative/Development Officers/Assistance to Rural Partnerships
SECTION 10.4.(a)  Of the funds appropriated to the Department of Health and Human Services, Division of Child Development and Early Education, for the North Carolina Partnership for Children, Inc., the sum of three million five hundred thousand dollars ($3,500,000) for the 2012‑2013 fiscal year shall be used by the North Carolina Partnership for Children, Inc., to develop and administer an early literacy initiative pilot program, to be known as "Read NC," hire four North Carolina Partnership for Children, Inc., development officers, and provide additional funds for rural partnerships. "Read NC" will focus on increasing the early literacy skills of children who are most at risk for reading below grade level.  The pilot program shall be distributed geographically to ensure adequate representation of the diverse areas of the State.
SECTION 10.4.(b)  The focus of the pilot program will be to actively engage parents, child care teachers, and communities to help young children build a firm foundation for language acquisition and literacy skills.  To that end, the pilot program shall do the following:
(1)	Educate parents in essential early literacy practices.
(2)	Increase the quality of early literacy programming in child care.
(3)	Increase early literacy opportunities for young children and families in community settings by incorporating the following programs:
a.	"Reach Out and Read," a program that supports doctors in their efforts to "prescribe" reading to young children and families during well‑child visits through early literacy guidance and book sharing, free books for children to keep, and literacy‑rich waiting rooms.
b.	"Raising a Reader" (RAR), a program that rotates bright red bags filled with award‑winning books into children's homes on a weekly basis, exposing children on average to over 100 books per rotation cycle, and pairs this book rotation with parent training and information on how to effectively share books to promote family literacy habits, language and literacy skills, and a love of learning. 
c.	"Motheread/Fatheread," a program that combines the teaching of literacy skills with child development and family empowerment issues.
d.	"Dolly Parton Imagination Library," a program that provides a free, age‑appropriate book each month to children ages birth to five years. 
SECTION 10.4.(c)  The Division of Child Development and Early Education and the North Carolina Partnership for Children, Inc., shall report by April 1, 2013, to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Committee on Health and Human Services, the Senate Appropriations/Base Budget Committee on Health and Human Services, and the House of Representatives Appropriations Subcommittee on Health and Human Services on the progress in complying with this section.
SECTION 10.4.(d)  The North Carolina Partnership for Children, Inc., shall include in its assistance to local partnerships, training and assistance with fund‑raising activities. Of the funds designated under subsection (a) of this section, the North Carolina Partnership for Children, Inc., shall hire a staff of four individuals who are qualified in the areas of grant writing and fund‑raising to assist local partnerships in raising the amount of non‑State funds required by law. The staff hired pursuant to this subsection shall be located regionally and be accessible to participate in the various local partnerships' activities.
SECTION 10.4.(e)  Of the funds designated under subsection (a) of this section, the North Carolina Partnership for Children, Inc., shall provide assistance to local partnerships located in rural areas of the State.

Medicaid Therapies Limit Revised
SECTION 10.5.  Section 10.37(a)(2) of S.L. 2011‑145 is repealed.

MEDICAID ELIGIBILITY/COLA DISREGARD
SECTION 10.6.(a)  Article 2 of Chapter 108A of the General Statutes is amended by adding a new section to read:
"§ 108A‑54.4  Income disregard for federal cost‑of‑living adjustments.
An increase in a Medical Assistance Program recipient's income due solely to a cost‑of‑living adjustment to federal Social Security and Railroad Retirement payments shall be disregarded when determining income eligibility for the Medical Assistance Program. This section shall not be deemed to render a recipient eligible for the Medical Assistance Program if all other eligibility requirements are not met."
SECTION 10.6.(b)  The Department of Health and Human Services shall apply to the Center for Medicare and Medicaid Services for any necessary approvals to implement the income disregard required in subsection (a) of this section.
SECTION 10.6.(c)  Subsection (a) of this section is effective January 1, 2013. The remainder of this section is effective when it becomes law.

MEDICAID NONEMERGENCY MEDICAL TRANSPORTATION SERVICES
SECTION 10.7.(a)  The Department of Health and Human Services, Division of Medical Assistance, in consultation with the Department of Transportation, Public Transportation Division, shall develop and issue a Request for Proposal (RFP) for the management of nonemergency medical transportation (NEMT) services for Medicaid recipients.
SECTION 10.7.(b)  The following information shall be considered when developing the RFP required by subsection (a) of this section:
(1)	An analysis of nonemergency transportation brokerage services implemented in other states that examines:
a.	State‑level governance and program performance evaluation.
b.	Assignment of geographic regions for operating and monitoring purposes.
c.	Quality of transportation service delivery and recipient access.
d.	Accuracy of eligibility determinations.
e.	Pricing models.
f.	Contract structure, including terms and conditions.
g.	Cost of service.
(2)	Assessment of the current coordination of human services transportation within North Carolina and the potential impact of brokerage services on transit system funding and operations.
(3)	A cost‑benefit analysis of implementing a statewide NEMT brokerage model for Medicaid recipients.
SECTION 10.7.(c)  The Division of Medical Assistance shall submit a written report to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Oversight Committee on Transportation on the status of the RFP by September 15, 2012.
SECTION 10.7.(d)  The Division of Medical Assistance shall consider the selection of a vendor or vendors generating a savings to the overall Medicaid transportation budget.
SECTION 10.7.(e)  The Department of Health and Human Services shall apply to the Centers for Medicare and Medicaid Services for any approvals necessary to implement the requirements of this section.

MODIFY AND IMPROVE PHARMACY SERVICES
SECTION 10.8.  Section 10.48 of S.L. 2011‑145 reads as rewritten:
"SECTION 10.48.(a)  The Department of Health and Human Services shall revise its pharmacy dispensing fees under the Medicaid Program in order to encourage a greater proportion of prescriptions dispensed to be generic prescriptions and thereby achieve savings of fifteen million dollars ($15,000,000) in the 2011‑2012 fiscal year.
"SECTION 10.48.(a1)  For the 2012‑2013 fiscal year, the Department shall modify and improve pharmacy services under the Medicaid Program in a manner that achieves savings of thirty million six hundred seventy‑one thousand five hundred seven dollars ($30,671,507) through the implementation of a special pharmacy for hemophilia drugs and the expansion of prior authorization requirements; provided, however, that an expansion of prior authorization requirements shall be consistent with the limitations set forth in Section 10.31(d)(2)r.5A. of S.L. 2011-145. In addition, the Department shall lower pharmacy dispensing fees to achieve additional savings within the Medicaid Program.
"SECTION 10.48.(b)  The Department shall report its progress in achieving the savings required by subsection (a) of this section on November 1, 2011, January 1, 2012, and quarterly thereafter to the House and Senate Appropriations Subcommittees on Health and Human Services and to the Fiscal Research Division. If any report required by this subsection reveals that those savings are not being achieved, the Department shall reduce prescription drug rates by an amount sufficient to achieve the savings.
"SECTION 10.48.(b1)  The Department shall report its progress in achieving the savings required by subsection (a1) of this section on November 1, 2012, and quarterly thereafter, to the House Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division."

SMART CARD PILOT PROGRAM
SECTION 10.9.(a)  S.L. 2011‑117 is repealed.
SECTION 10.9.(b)  The Department of Health and Human Services shall implement a smart card pilot program that involves enrollment, distribution, and use of smart cards by designated vendors and recipients as replacements for currently used Medicaid assistance cards. The Provider and Recipient Services Unit of the Division of Medical Assistance (DMA) shall administer the pilot program. The Department may contract with a third‑party vendor or vendors to develop and execute the pilot program. If the Department elects to use a third‑party vendor or vendors to develop and execute the pilot program, the Department shall select the vendor or vendors through a Request for Proposal process conducted prior to implementation of the pilot program.  In developing and implementing the pilot program, the Department shall comply with all applicable information technology procurement requirements. The smart card pilot program shall not expand beyond the areas described in subsection (c) of this section unless the expansion is approved by an act of the General Assembly.
SECTION 10.9.(c)  The purpose of the pilot program is to evaluate the feasibility of the smart card program in different geographical regions of the State. DMA shall select a region of the State to participate in the pilot program that is served by Community Care of North Carolina and meets all other requirements set forth in this section. The pilot program shall be conducted in two urban areas and two rural areas with a representative group of Medicaid recipients from each area. 
SECTION 10.9.(d)  The pilot program shall include and evaluate the use of at least two different types of available technology that are designed to do all of the following:
(1)	Authenticate recipients at the onset and completion of each point of transaction in order to prevent card sharing and other forms of fraud.
(2)	Deny ineligible persons at the point of transaction.
(3)	Authenticate providers at the point of transaction to prevent phantom billing and other forms of provider fraud.
(4)	Secure and protect the personal identity and information of recipients.
(5)	Reduce the total amount of medical assistance expenditures by reducing the average cost per recipient.
SECTION 10.9.(e)  The pilot program may include all of the following:
(1)	A secure Web‑based information system for recording and reporting authenticated transactions.
(2)	A secure Web‑based information system that interfaces with the appropriate State databases to determine eligibility of recipients.
(3)	A system that gathers analytical information to be provided to business intelligence companies in order to assist in business intelligence processes.
(4)	A smart card with the ability to store multiple recipients' information on one card.
(5)	An image of the recipient stored on both the smart card and database.
SECTION 10.9.(f)  The pilot program shall not include a requirement for preenrollment of recipients.
SECTION 10.9.(g)  In conducting the pilot program, the Department may do the following:
(1)	Incorporate additional or alternative methods of authentication of recipients.
(2)	Enter and store billing codes, deductible amounts, and bill confirmations.
(3)	Allow electronic prescribing services and prescription database integration and tracking in order to prevent medical error through information sharing and to reduce pharmaceutical abuse and lower health care costs.
(4)	Implement quick‑pay incentives for providers who use electronic prescribing services, electronic health records, electronic patient records, or computerized patient records that automatically synchronize with recipients' smart cards and electronically submit a claim.
(5)	Adapt smart cards, fingerprint scanners, and card readers, for use by other State programs administered by the Department in order to reduce costs associated with the necessity of multiple cards per recipient.
SECTION 10.9.(h)  During the pilot program, the Department shall evaluate the feasibility of expanding the pilot program, including the need to develop rules and policies related to the following:
(1)	Lost, forgotten, or stolen cards.
(2)	Enrollment of all recipients, regardless of age, for participation in the program.
(3)	Distribution and activation of smart cards for designated recipients.
SECTION 10.9.(i)  The Department shall work with the Division of Motor Vehicles to ensure that State data, such as drivers license photos and other identification data, is leveraged to reduce program cost.
SECTION 10.9.(j)  By no later than March 1, 2013, the Department shall submit a detailed written report to the Joint Legislative Oversight Committee on Health and Human Services, the Joint Legislative Oversight Committee on Information Technology, the Senate Committee on Health and Human Services, the House Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The report shall include (i) detailed results of the pilot in the four different geographic regions of the State, including cost‑savings achieved in each region; (ii) costs associated with implementation of the pilot program, including payments to vendors; and (iii) an evaluation of the feasibility of, and issues associated with, implementing the smart card program statewide.
SECTION 10.9.(k)  Of the funds appropriated from the General Fund to the Department of Health and Human Services for the 2012‑2013 fiscal year, the sum of up to one million dollars ($1,000,000) may be used to implement the smart card pilot program authorized by this section.

FUNDS FOR INPATIENT PSYCHIATRIC BEDS OR BED DAYS
SECTION 10.10.  Section 10.8(b) of S.L. 2011‑145 reads as rewritten:
"SECTION 10.8.(b)  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of twenty‑nine million one hundred twenty‑one thousand six hundred forty‑four dollars ($29,121,644) for the 2011‑2012 fiscal year and the sum of forty‑seven million two hundred seventy‑one thousand six hundred forty‑four dollars ($47,271,644) for the 2012‑2013 fiscal year shall be allocated for the purchase of local inpatient psychiatric beds or bed days. In addition, at the discretion of the Secretary of Health and Human Services, existing funds allocated to LMEs for community‑based mental health, developmental disabilities, and substance abuse services may be used to purchase additional local inpatient psychiatric beds or bed days. These beds or bed days shall be distributed across the State in LME catchment areas, including any catchment areas served by managed care organizations, and according to need as determined by the Department. The Department shall enter into contracts with the LMEs and community hospitals for the management of these beds or bed days. The Department shall work to ensure that these contracts are awarded equitably around all regions of the State. Local inpatient psychiatric beds or bed days shall be managed and controlled by the LME, including the determination of which local or State hospital the individual should be admitted to pursuant to an involuntary commitment order. Funds shall not be allocated to LMEs but shall be held in a statewide reserve at the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services to pay for services authorized by the LMEs and billed by the hospitals through the LMEs. LMEs shall remit claims for payment to the Division within 15 working days of receipt of a clean claim from the hospital and shall pay the hospital within 30 working days of receipt of payment from the Division. If the Department determines (i) that an LME is not effectively managing the beds or bed days for which it has responsibility, as evidenced by beds or bed days in the local hospital not being utilized while demand for services at the State psychiatric hospitals has not reduced, or (ii) the LME has failed to comply with the prompt payment provisions of this subsection, the Department may contract with another LME to manage the beds or bed days, or, notwithstanding any other provision of law to the contrary, may pay the hospital directly. The Department shall develop reporting requirements for LMEs regarding the utilization of the beds or bed days. Funds appropriated in this section for the purchase of local inpatient psychiatric beds or bed days shall be used to purchase additional beds or bed days not currently funded by or through LMEs and shall not be used to supplant other funds available or otherwise appropriated for the purchase of psychiatric inpatient services under contract with community hospitals, including beds or bed days being purchased through Hospital Utilization Pilot funds appropriated in S.L. 2007‑323. Not later than March 1, 2012, the Department shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division on a uniform system for beds or bed days purchased (i) with local funds, (ii) from existing State appropriations, (iii) under the Hospital Utilization Pilot, and (iv) purchased using funds appropriated under this subsection."

Examination of the State's Delivery of Mental Health Services
SECTION 10.11.(a)  The Joint Legislative Oversight Committee on Health and Human Services shall appoint a subcommittee to examine the State's delivery of mental health services. As part of its examination, the subcommittee shall review all of the following:
(1)	The State's progress in reforming the mental health system to deliver mental health services to individuals in the most integrated setting appropriate, without unnecessary institutionalization.
(2)	The State's capacity to meet its growing mental health needs with community‑based supports.
(3)	The process for determining the catchment areas served by the State's psychiatric hospitals, with consideration of both of the following:
a.	Factors used in assigning the geographic groupings of local management areas and managed care organizations into catchment areas.
b.	Alternatives to the current process for determining the catchment areas served by the State's psychiatric hospitals, including a determination of whether there is a more efficient and equitable manner of assigning hospital catchment areas.
SECTION 10.11.(b)  The subcommittee shall report its findings and recommendations to the Joint Legislative Oversight Committee on Health and Human Services on or before January 15, 2013, at which time it shall terminate.

Funds for Family Planning Services by Local Health Departments
SECTION 10.12.  Of the funds appropriated in this act to the Department of Health and Human Services for the 2012‑2013 fiscal year, none shall be allocated to renewing, extending, or entering into new contracts for the provision of family planning services and pregnancy prevention activities with providers other than local health departments. Upon the expiration of any contracts in effect during the 2011‑2012 fiscal year between the Division of Public Health and private providers of family planning services and pregnancy prevention activities, the Department shall reallocate three hundred forty‑three thousand dollars ($343,000) of these contract funds to local health departments.  Local health departments receiving funds under this section shall not contract with outside vendors for the provision of family planning services or pregnancy prevention activities. These services shall be provided directly by local health department recipients.  This section does not apply to contracts administered by the Department pursuant to G.S. 130A‑131.15A.

Community Health Grant Funding
SECTION 10.13.(a)  By no later than January 1, 2013, the Department of Health and Human Services shall enter into contracts obligating the entire amount of funds appropriated in this act for community health centers for the 2012‑2013 fiscal year. These funds shall be used only for community health grants to nonprofit or public health care safety nets that provide primary and preventive medical services to uninsured or medically indigent patients, including free clinics, community health care centers, rural health centers, school‑based health centers, and local health departments. The Department shall not use these funds to supplant any reduction in funding prescribed by the General Assembly for the 2012‑2013 fiscal year.
SECTION 10.13.(b)  By no later than March 1, 2013, the Department of Health and Human Services shall submit a written report on community health grants awarded during the 2012‑2013 fiscal year to the Joint Legislative Oversight Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the House Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The report shall include at least all of the following:
(1)	The identity and a brief description of the community health activities performed by each grantee.
(2)	The amount of funding awarded to each grantee.
(3)	The number of persons served by each grantee.

Funds for Community‑Based Health and Wellness Initiatives
SECTION 10.14.(a)  Funds appropriated in this act to the Department of Health and Human Services for the 2012‑2013 fiscal year for community‑based health and wellness programs and initiatives shall be used only for the following:
(1)	Programs to prevent and reduce tobacco use by students in grades kindergarten through 12. The Department shall not spend any funds allocated to these programs for statewide marketing and media campaigns for tobacco cessation and prevention. This subdivision shall not be construed to prohibit the use of these funds for (i) local or community‑based tobacco cessation and prevention campaigns, (ii) tobacco cessation and prevention campaigns conducted on the premises of North Carolina elementary schools, middle schools, and high schools, or (iii) the North Carolina Tobacco Use Quitline known as QuitlineNC.
(2)	ChecKmeds.
(3)	Medication Assistance Program.
(4)	Roanoke Chowan Telehealth Network.
(5)	County health department initiatives. County health departments shall use these funds only for county community health and wellness initiatives to promote healthy behaviors, including, but not limited to, tobacco cessation, improved nutrition, increased physical activity, disease prevention, and school nurse positions. Funds received by county health departments pursuant to this section shall not supplant existing funds for health and wellness programs or initiatives.
SECTION 10.14.(b)  By December 1, 2013, the Department shall submit a written report to the Joint Legislative Oversight Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on the use of these funds. The report shall include the identity and a brief description of each grantee and each program or initiative offered by the grantee; the amount of funding awarded to each grantee; and the number of persons served by each grantee, broken down by program or initiative.

Delay Local Receipt of Larger Portion of Food & Lodging Fees
SECTION 10.15.  Section 31.11A(c) of S.L. 2011‑145, as amended by Section 61A of S.L. 2011‑391, reads as rewritten:
"SECTION 31.11A.(c)  Subsection (a) of this section becomes effective July 1, 2013."

AIDS Drug Assistance Program Pilot
SECTION 10.16.(a)  The Department of Health and Human Services, Division of Public Health, shall develop and implement a pilot program to begin on January 1, 2013, and terminate on December 31, 2013, to enroll individuals receiving services under the Aids Drug Assistance Program (ADAP) in Inclusive Health North Carolina. The purposes of the pilot are (i) to determine cost savings to ADAP through enrollment of ADAP recipients in a preexisting conditions insurance program (PCIP) and (ii) to inform the Department of best practices in transitioning ADAP recipients to Medicaid as they become eligible. The Department shall select up to three HIV/AIDS care provider agencies with the highest number of ADAP recipients to participate in the pilot. The Department shall ensure that the total number of ADAP recipients participating in the pilot meets all of the following requirements:
(1)	Participation does not exceed ten percent (10%) of the total number of ADAP recipients receiving services at the selected HIV/AIDS care provider agencies.
(2)	ADAP recipients shall be enrolled only in Inclusive Health North Carolina up to the point that enrollment remains cost‑neutral or achieves cost savings to ADAP, as determined by an actuary. The Department shall obtain actuarial services to ensure the cost neutrality or cost savings of enrolling ADAP recipients in Inclusive Health North Carolina prior to implementing the pilot program. The Department shall not implement the pilot program if the actuary determines implementation will not be cost‑neutral or achieve savings.
SECTION 10.16.(b)  The Department may contract with an outside vendor to evaluate the results of the pilot program.  By no later than April 1, 2014, the Department shall report to the Joint Legislative Oversight Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the House Appropriations Subcommittee on Health and Human Services on the results of the pilot program.  The report shall include all of the following:
(1)	The number of pilot program participants.
(2)	A cost analysis for the pilot program, including a cost comparison between ADAP recipients who received services through Inclusive Health North Carolina and ADAP recipients who received services only through ADAP.
(3)	Feedback from pilot program participants.
(4)	Best practices identified by the Department for transitioning ADAP recipients to Medicaid as they become eligible.
(5)	Improved health outcomes.
SECTION 10.16.(c)  The Department shall use funds appropriated to it to develop and implement the pilot program authorized by this section. The Division of Public Health shall manage the number of ADAP recipients enrolled in Inclusive Health North Carolina as part of the pilot program and the number of ADAP recipients receiving services only through ADAP in order to ensure that pilot program expenditures do not exceed available funds.

Position Eliminations for Fiscal Year 2012‑2013
SECTION 10.17.  For fiscal year 2012‑2013, the Department of Health and Human Services shall eliminate an additional 50 full‑time equivalent positions that have been continuously vacant since July 1, 2010. To the extent possible, the Secretary shall not eliminate positions assigned to the Division of State Operated Healthcare Facilities.  This section shall not be construed to give the Department flexibility in achieving the savings attributed to these 50 position eliminations by any other means.  By October 1, 2012, the Secretary shall submit a report to the Joint Legislative Oversight Committee on Health and Human Services, the House Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on the position eliminations required by this section.  The report shall include at least all of the following information about each eliminated position: 
(1)	Division assignment.
(2)	Title.
(3)	Salary.
(4)	Fringe benefits.
(5)	The percentage and identity of any non‑State funding sources.

Reduce Funding for Nonprofit Organizations
SECTION 10.18.(a)  Section 10.18 of S.L. 2011‑145 is repealed.
SECTION 10.18.(b)  For fiscal year 2012‑2013, the Department of Health and Human Services shall reduce the amount of funds allocated to nonprofit organizations by five million dollars ($5,000,000) on a recurring basis. The Department shall not, under any circumstances, use any funds, including State funds, federal funds, special revenue funds, or departmental receipts, to supplement the reduced amount of funding to be allocated to nonprofit organizations pursuant to this subsection. In achieving the reductions required by this subsection, the Department (i) shall minimize reductions to funds allocated to nonprofit organizations for the provision of direct services and (ii) shall not reduce funds allocated to nonprofit organizations to pay for direct services to individuals with developmental disabilities.

Reports by Non‑State Entities receiving direct state appropriations
SECTION 10.19.(a)  The Department of Health and Human Services shall require the following non‑State entities to match ten percent (10%) of the total amount of State appropriations received each fiscal year. In addition, the Department shall direct these entities to submit a written report annually, beginning December 1, 2012, of all activities funded by State appropriations to the Joint Legislative Oversight Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division:
(1)	North Carolina Senior Games, Inc.
(2)	ARC of North Carolina.
(3)	ARC of North Carolina – Wilmington.
(4)	Autism Society of North Carolina.
(5)	The Mariposa School for Children with Autism.
(6)	Easter Seals UCP of North Carolina.
(7)	Easter Seals UCP of North Carolina and Virginia.
(8)	ABC of North Carolina Child Development Center.
(9)	Residential Services, Inc.
(10)	Oxford House, Inc.
(11)	Brain Injury Association of North Carolina.
(12)	Food Bank of Central and Eastern North Carolina, Inc.
(13)	Food Bank of the Albemarle.
(14)	Manna Food Bank.
(15)	Second Harvest Food Bank of Metrolina, Inc.
(16)	Second Harvest Food Bank of Northwest North Carolina, Inc.
(17)	Second Harvest Food Bank of Southeast North Carolina
(18)	Prevent Blindness NC.
SECTION 10.19.(b)  The report required by subsection (a) of this section shall include the following information about the fiscal year preceding the year in which the report is due:
(1)	The entity's mission, purpose, and governance structure.
(2)	A description of the types of programs, services, and activities funded by State appropriations.
(3)	Statistical and demographical information on the number of persons served by these programs, services, and activities, including the counties in which services are provided.
(4)	Outcome measures that demonstrate the impact and effectiveness of the programs, services, and activities.
(5)	A detailed program budget and list of expenditures, including all positions funded and funding sources.
(6)	The source and amount of any matching funds received by the entity.

Report on Lapsed Salary Funds
SECTION 10.20.  Beginning no later than November 1, 2012, the Department of Health and Human Services shall submit quarterly reports to the Joint Legislative Oversight Committee on Health and Human Services, the House Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on the use of lapsed salary funds by each Division within the Department. For each Division, the report shall include the following information about the preceding calendar quarter:
(1)	The total amount of lapsed salary funds.
(2)	The number of full‑time equivalent positions comprising the lapsed salary funds.
(3)	The Fund Code for each full‑time equivalent position included in the number reported pursuant to subdivision (2) of this section.
(4)	The purposes for which the Department expended lapsed salary funds.

Preventive Health Inventory and CONSOLIDATION Plan
SECTION 10.21.(a) The Department of Health and Human Services shall complete an inventory of its preventive health services and activities, including those provided under the North Carolina Partnership for Children, Inc. The inventory shall identify (i) services and activities provided directly by the Department and (ii) services and activities provided by grantees and outside vendors.
SECTION 10.21.(b)  The Department shall conduct a comprehensive assessment of all services and activities included in the inventory prepared pursuant to subsection (a) of this section.  The comprehensive assessment shall include at least all of the following for each identified service or activity:
(1)	A program name and a description of the services or activities.
(2)	The number of persons served, if applicable.
(3)	A breakdown of all funding sources.
SECTION 10.21.(c)  By October 1, 2012, the Department shall report on the information required by this section to the Joint Legislative Oversight Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.
SECTION 10.21.(d)  The Department shall develop a plan to consolidate all preventive health services and activities. By no later than March 1, 2013, the Department shall submit this plan to the Joint Legislative Oversight Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division. The Department shall not implement this plan without approval by the General Assembly.

Revise Dates/TANF Benefit Implementation
SECTION 10.22.  Section 10.55 of S.L. 2011‑145 reads as rewritten:
"SECTION 10.55.(a)  The General Assembly approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan FY 2012‑2014," prepared by the Department of Health and Human Services and presented to the General Assembly. The North Carolina Temporary Assistance for Needy Families State Plan covers the period October 1, 2012, through September 30, 2014. The Department shall submit the State Plan, as revised in accordance with subsection (b) of this section, to the United States Department of Health and Human Services, as amended by this act or any other act of the 2011 General Assembly.
"SECTION 10.55.(b)  The counties approved as Electing Counties in the North Carolina Temporary Assistance for Needy Families State Plan FY 2012‑2014, as approved by this section are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson.
"SECTION 10.55.(c)  Counties that submitted the letter of intent to remain as an Electing County or to be redesignated as an Electing County and the accompanying county plan for fiscal year 2012 through 2014, pursuant to G.S. 108A‑27(e), shall operate under the Electing County budget requirements effective July 1, 2012. For programmatic purposes, all counties referred to in this subsection shall remain under their current county designation through September 30, 2014.
"SECTION 10.55.(d)  For the 2012‑2014 fiscal year, Electing Counties shall be held harmless to their Work First Family Assistance allocations for the 2012‑2014 fiscal year, provided that remaining funds allocated for Work First Family Assistance and Work First Diversion Assistance are sufficient for payments made by the Department on behalf of Standard Counties pursuant to G.S. 108A‑27.11(b).
"SECTION 10.55.(e)  In the event that departmental projections of Work First Family Assistance and Work First Diversion Assistance for the 2012‑2014 fiscal year indicate that remaining funds are insufficient for Work First Family Assistance and Work First Diversion Assistance payments to be made on behalf of Standard Counties, the Department is authorized to deallocate funds, of those allocated to Electing Counties for Work First Family Assistance in excess of the sums set forth in G.S. 108A‑27.11, up to the requisite amount for payments in Standard Counties. Prior to deallocation, the Department shall obtain approval by the Office of State Budget and Management. If the Department adjusts the allocation set forth in subsection (d) of this section, then a report shall be made to the Joint Legislative Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division."

Remove cap on Special Assistance In‑Home Payment Recipients
SECTION 10.23.  G.S. 108A‑47.1 reads as rewritten:
"§ 108A‑47.1.  Special Assistance in‑home payments.
The Department of Health and Human Services may use funds from the existing State‑County Special Assistance budget to provide Special Assistance payments to eligible individuals 18 years of age or older in in‑home living arrangements. The standard monthly payment to individuals enrolled in the Special Assistance in‑home program shall be seventy‑five percent (75%) of the monthly payment the individual would receive if the individual resided in an adult care home and qualified for Special Assistance, except if a lesser payment amount is appropriate for the individual as determined by the local case manager. The Department shall implement Special Assistance in‑home eligibility policies and procedures to assure that in‑home program participants are those individuals who need and, but for the in‑home program, would seek placement in an adult care home facility. The Department's policies and procedures shall include the use of a functional assessment. The Department shall make this in‑home option available to all counties on a voluntary basis. To the maximum extent possible, the Department shall consider geographic balance in the dispersion of payments to individuals across the State."

Telecommunications Relay Service
SECTION 10.24.(a)  G.S. 62‑157(d1) reads as rewritten:
"(d1)	The Department of Health and Human Services shall utilize revenues from the wireless surcharge collected under subsection (i) of this section to support the Division of Services for the Deaf and the Hard of Hearing, in accordance with G.S. 143B‑216.33, G.S. 143B‑216.34, and Chapter 8B of the General Statutes."
SECTION 10.24.(b)  G.S. 62‑157(e) reads as rewritten:
"(e)	Administration of Service. – The Department of Health and Human Services shall administer the statewide telecommunications relay service program, including its establishment, operation, and promotion. The Department may contract out the provision of this service for four‑year periods to one or more service providers, using the provisions of G.S. 143‑129. The Department shall administer all programs and services, including the Regional Resource Centers within the Division of Services for the Deaf and the Hard of Hearing in accordance with G.S. 143B‑216.33, G.S. 143B‑216.34, and Chapter 8B of the General Statutes."

DHHS Block Grants
SECTION 10.25.(a)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2013, according to the following schedule:

TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) FUNDS

Local Program Expenditures

Division of Social Services

01.	Work First Family Assistance	$ 61,671,297

02.	Work First County Block Grants	83,386,330

03.	Work First Electing Counties	2,378,213

04.	Adoption Services – Special Children's Adoption Fund	2,026,877

05.	Family Violence Prevention	2,200,000

06.	Child Protective Services – Child Welfare
	Workers for Local DSS	15,893,996

07.	Child Welfare Collaborative	754,115

Division of Child Development

08.	Subsidized Child Care Program	59,645,662

09.	Swap Child Care Subsidy	6,352,644

Division of Public Health

10.	Teen Pregnancy Initiatives	2,500,000

DHHS Administration

11.	Division of Social Services	2,482,260

12.	Office of the Secretary	34,042

Transfers to Other Block Grants

Division of Child Development

13.	Transfer to the Child Care and Development Fund	75,773,001

14.	Transfer to Social Services Block Grant for Child
	Protective Services – Child Welfare Training in
	Counties	1,300,000

15.	Transfer to Social Services Block Grant for Child
	Protective Services	5,040,000

16.	Transfer to Social Services Block Grant for County
	Departments of Social Services for Children's Services	4,148,001

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) FUNDS	$ 325,586,438

TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF)
EMERGENCY CONTINGENCY FUNDS 

Local Program Expenditures

Division of Social Services

01.	Work First County Block Grants	$ 11,066,985

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF)
EMERGENCY CONTINGENCY FUNDS	$ 11,066,985

SOCIAL SERVICES BLOCK GRANT

Local Program Expenditures

Divisions of Social Services and Aging and Adult Services

01.	County Departments of Social Services	$ 35,211,798
	(Transfer from TANF $4,148,001)

02.	Child Protective Services (Transfer from TANF)	5,040,000

03.	State In‑Home Services Fund	2,101,113

04.	State Adult Day Care Fund	2,155,301

05.	Child Protective Services/CPS Investigative
	Services‑Child Medical Evaluation Program	609,455

06.	Foster Care Services	1,497,138

07.	Special Children Adoption Incentive Fund	500,000

08.	Child Protective Services‑Child Welfare Training
	for Counties (Transfer from TANF)	1,300,000

09.	Home and Community Care Block Grant (HCCBG)	1,834,077

10.	Maternity Homes	925,085

11.	Child Advocacy Centers	375,000

12.	Work First – Boys and Girls Clubs	2,452,500

13.	Food Banks	1,000,000

14.	Child Care Subsidy	2,452,500

15.	Developmental Disabilities Services Program	4,356,604

Division of Public Health

16.	HIV/STD Prevention and Community Planning	145,819

17.	Prevent Blindness	150,000

Division of Vocational Rehabilitation

18.	Vocational Rehabilitation Services – Easter Seal Society/UCP
	Community Health Program	188,263

DHHS Program Expenditures

Division of Services for the Blind

19.	Independent Living Program	3,633,077

20.	Accessible Electronic Information for Blind and Disabled Persons	75,000

Division of Health Service Regulation

21.	Adult Care Licensure Program	411,897

22.	Mental Health Licensure and Certification Program	205,668

DHHS Administration

23.	Division of Aging and Adult Services	624,454

24.	Division of Social Services	701,140

25.	Office of the Secretary/Controller's Office	138,058

26.	Division of Child Development	15,000

27.	Division of Mental Health, Developmental
	Disabilities, and Substance Abuse Services	29,665

28.	Division of Health Service Regulation	128,562

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 68,257,174

LOW‑INCOME HOME ENERGY ASSISTANCE BLOCK GRANT

Local Program Expenditures

Division of Social Services

01.	Low‑Income Energy Assistance Program (LIEAP)	$ 15,000,000

02.	Crisis Intervention Program (CIP)	33,255,130

Local Administration

Division of Social Services

03.	County DSS Administration	4,444,717

DHHS Administration

04.	Office of the Secretary/DIRM	219,490

05.	Office of the Secretary/Controller's Office	9,779

Transfers to Other State Agencies

Department of Commerce

06.	Weatherization Program	8,464,517

07.	Heating Air Repair and Replacement
	Program (HARRP)	3,762,265

08.	Local Residential Energy Efficiency Service
	Providers – Weatherization	19,825

09.	Local Residential Energy Efficiency Service
	Providers – HARRP	180,041

10.	Department of Commerce Administration –
	Weatherization	19,825

11.	Department of Commerce Administration –
	HARRP	180,041

Department of Administration

12.	N.C. Commission on Indian Affairs	87,736

TOTAL LOW‑INCOME HOME ENERGY ASSISTANCE
BLOCK GRANT	$ 65,643,366

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

Local Program Expenditures

Division of Child Development

01.	Subsidized Child Care Services (CCDF)	$ 158,004,959

02.	Electronic Tracking System	3,336,345

03.	Subsidized Child Care Services
	(Transfer from TANF; Smart Start $4,000,000)	75,773,001

04.	Quality and Availability Initiatives
	(TEACH Program $3,800,000)	25,948,434

Division of Social Services

05.	Local Subsidized Child Care Services Support	16,471,587
	(4% Administrative Allowance)

DHHS Administration

Division of Child Development

06.	DCD Administrative Expenses	6,539,277

Division of Central Administration

07.	DHHS Central Administration – DIRM
	Technical Services	774,317

TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT	$   286,847,920

MENTAL HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

01.	Mental Health Services – Adult	$   8,870,595

02.	Mental Health Services – Child	5,121,991

03.	Administration	100,000

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT	$ 14,092,586

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

Local Program Expenditures

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

01.	Substance Abuse Services – Adult	$ 15,328,802

02.	Substance Abuse Treatment Alternative for Women	6,050,300

03.	Substance Abuse – HIV and IV Drug	3,919,723

04.	Substance Abuse Prevention – Child	7,186,857

05.	Substance Abuse Services – Child	4,940,500

06.	Administration	454,000

Division of Public Health

07.	Risk Reduction Projects	575,654

08.	Aid‑to‑Counties	190,295

TOTAL SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT	$ 38,646,131

MATERNAL AND CHILD HEALTH BLOCK GRANT

Local Program Expenditures

Division of Public Health

01.	Children's Health Services
	(Nurse‑Family Partnership $375,000)	$   8,528,156

02.	Women's Health
	(March of Dimes $350,000; Teen Pregnancy
	Prevention Initiatives $650,000; Perinatal
	Quality Collaborative $250,000; 17P Project $47,000)	8,510,783

03.	Oral Health	42,268

DHHS Program Expenditures

Division of Public Health

04.	Children's Health Services	1,417,087

05.	Women's Health	136,628

06.	State Center for Health Statistics	164,318

07.	Quality Improvement in Public Health	1,636

08.	Health Promotion	89,374

DHHS Administration

Division of Public Health

09.	Division of Public Health Administration	558,831

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 19,449,081

COMMUNITY SERVICES BLOCK GRANT

Local Program Expenditures

Office of Economic Opportunity

01.	Community Action Agencies	$ 18,075,488

02.	Limited Purpose Agencies	1,004,194

DHHS Administration

03.	Office of Economic Opportunity	1,004,194

TOTAL COMMUNITY SERVICES BLOCK GRANT	$ 20,083,876

GENERAL PROVISIONS
SECTION 10.25.(b)  Information to Be Included in Block Grant Plans. – The Department of Health and Human Services shall submit a separate plan for each Block Grant received and administered by the Department, and each plan shall include the following:
(1)	A delineation of the proposed allocations by program or activity, including State and federal match requirements.
(2)	A delineation of the proposed State and local administrative expenditures.
(3)	An identification of all new positions to be established through the Block Grant, including permanent, temporary, and time‑limited positions.
(4)	A comparison of the proposed allocations by program or activity with two prior years' program and activity budgets and two prior years' actual program or activity expenditures.
(5)	A projection of current year expenditures by program or activity.
(6)	A projection of federal Block Grant funds available, including unspent federal funds from the current and prior fiscal years.
SECTION 10.25.(c)  Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall allocate the increase proportionally across the program and activity appropriations identified for that Block Grant in this section. In allocating an increase in federal fund availability, the Office of State Budget and Management shall not approve funding for new programs or activities not appropriated in this section.
If the Congress of the United States decreases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall develop a plan to adjust the block grants based on reduced federal funding.
Notwithstanding the provisions of this subsection, for the 2012‑2013 fiscal year, increases in the federal fund availability for the Temporary Assistance to Needy Families (TANF) Block Grant shall be used for the North Carolina Child Care Subsidy program to pay for child care in four‑ or five‑star rated facilities for four‑year‑old children.
Prior to allocating the change in federal fund availability, the proposed allocation must be approved by the Office of State Budget and Management. If the Department adjusts the allocation of any Block Grant due to changes in federal fund availability, then a report shall be made to the Joint Legislative Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 10.25.(d)  Appropriations from federal Block Grant funds are made for the fiscal year ending June 30, 2013, according to the schedule enacted for State fiscal year 2012‑2013 or until a new schedule is enacted by the General Assembly.
SECTION 10.25.(e)  All changes to the budgeted allocations to the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services that are not specifically addressed in this section shall be approved by the Office of State Budget and Management, and the Office of State Budget and Management shall consult with the Joint Legislative Commission on Governmental Operations for review prior to implementing the changes. The report shall include an itemized listing of affected programs, including associated changes in budgeted allocations. All changes to the budgeted allocations to the Block Grants shall be reported immediately to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division. This subsection does not apply to Block Grant changes caused by legislative salary increases and benefit adjustments.
SECTION 10.25.(f)  If the Preventive Health Services Block Grant is funded at the federal level and the State receives a block grant for Preventive Health Services, the 2011‑2012 allocation plan shall remain in effect for the 2012‑2013 fiscal year.

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS
SECTION 10.25.(g)  The sum of eighty‑three million three hundred eighty‑six thousand three hundred thirty dollars ($83,386,330) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for the 2012‑2013 fiscal year shall be used for Work First County Block Grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures.
SECTION 10.25.(h)  The sum of two million four hundred eighty‑two thousand two hundred sixty dollars ($2,482,260) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for the 2012‑2013 fiscal year shall be used to support administration of TANF‑funded programs.
SECTION 10.25.(i)  The sum of two million two hundred thousand dollars ($2,200,000) appropriated under this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for the 2012‑2013 fiscal year shall be used to provide domestic violence services to Work First recipients. These funds shall be used to provide domestic violence counseling, support, and other direct services to clients. These funds shall not be used to establish new domestic violence shelters or to facilitate lobbying efforts. The Division of Social Services may use up to seventy‑five thousand dollars ($75,000) in TANF funds to support one administrative position within the Division of Social Services to implement this subsection.
Each county department of social services and the local domestic violence shelter program serving the county shall develop jointly a plan for utilizing these funds. The plan shall include the services to be provided and the manner in which the services shall be delivered. The county plan shall be signed by the county social services director or the director's designee and the domestic violence program director or the director's designee and submitted to the Division of Social Services by December 1, 2012. The Division of Social Services, in consultation with the Council for Women, shall review the county plans and shall provide consultation and technical assistance to the departments of social services and local domestic violence shelter programs, if needed.
The Division of Social Services shall allocate these funds to county departments of social services according to the following formula: (i) each county shall receive a base allocation of five thousand dollars ($5,000) and (ii) each county shall receive an allocation of the remaining funds based on the county's proportion of the statewide total of the Work First caseload as of July 1, 2012, and the county's proportion of the statewide total of the individuals receiving domestic violence services from programs funded by the Council for Women as of July 1, 2012. The Division of Social Services may reallocate unspent funds to counties that submit a written request for additional funds.
SECTION 10.25.(j)  The sum of fifteen million eight hundred ninety‑three thousand nine hundred ninety‑six dollars ($15,893,996) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in TANF funds for the 2012‑2013 fiscal year for child welfare improvements shall be allocated to the county departments of social services for hiring or contracting staff to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post‑adoption services for eligible families.
Counties shall maintain their level of expenditures in local funds for Child Protective Services' workers. Of the block grant funds appropriated for Child Protective Services' workers, the total expenditures from State and local funds for the 2012‑2013 fiscal year shall not be less than the total expended from State and local funds for the 2011‑2012 fiscal year. 
SECTION 10.25.(k)  The sum of two million twenty‑six thousand eight hundred seventy‑seven dollars ($2,026,877) appropriated in this section in TANF funds to the Department of Health and Human Services, Special Children Adoption Fund, for the 2012‑2013 fiscal year shall be used in accordance with G.S. 108A‑50.2, as enacted in Section 10.48 of S.L. 2009‑451. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A‑50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.
SECTION 10.25.(l)  The sum of seven hundred fifty‑four thousand one hundred fifteen dollars ($754,115) appropriated in this section to the Department of Health and Human Services in TANF funds for the 2012‑2013 fiscal year shall be used to continue support for the Child Welfare Collaborative.

SOCIAL SERVICES BLOCK GRANT
SECTION 10.25.(m)  The sum of thirty‑five million two hundred eleven thousand seven hundred ninety‑eight dollars ($35,211,798) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2012‑2013 fiscal year shall be used for County Block Grants. The Division shall certify these funds in the appropriate State level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures.
SECTION 10.25.(n)  The sum of one million three hundred thousand dollars ($1,300,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2012‑2013 fiscal year shall be used to support various child welfare training projects as follows:
(1)	Provide a regional training center in southeastern North Carolina.
(2)	Provide training for residential child caring facilities.
(3)	Provide for various other child welfare training initiatives.
SECTION 10.25.(o)  The sum of one million four hundred ninety‑seven thousand one hundred thirty‑eight dollars ($1,497,138) appropriated in this section in the Social Services Block Grant for child caring agencies for the 2012‑2013 fiscal year shall be allocated in support of State foster home children.
SECTION 10.25.(p)  The Department of Health and Human Services is authorized, subject to the approval of the Office of State Budget and Management, to transfer Social Services Block Grant funding allocated for departmental administration between divisions that have received administrative allocations from the Social Services Block Grant.
SECTION 10.25.(q)  Social Services Block Grant funds appropriated for the Special Children's Adoption Incentive Fund will require a fifty percent (50%) local match.
SECTION 10.25.(r)  The sum of five million forty thousand dollars ($5,040,000) appropriated in this section in the Social Services Block Grant for the 2012‑2013 fiscal year shall be allocated to the Department of Health and Human Services, Division of Social Services.  The Division shall allocate these funds to local departments of social services to replace the loss of Child Protective Services State funds that are currently used by county government to pay for Child Protective Services staff at the local level. These funds shall be used to maintain the number of Child Protective Services workers throughout the State.  These Social Services Block Grant funds shall be used to pay for salaries and related expenses only and are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty‑five percent (25%).
SECTION 10.25.(s)  The sum of two million four hundred fifty‑two thousand five hundred dollars ($2,452,500) appropriated in this section to the Department of Social Services, Division of Social Services, in the Social Services Block Grant for Boys and Girls Clubs for the 2012‑2013 fiscal year shall be used to make grants for approved programs. The Department of Health and Human Services, in accordance with federal regulations for the use of Social Services Block Grant funds, shall administer a grant program to award funds to the Boys and Girls Clubs across the State in order to implement programs that improve the motivation, performance, and self‑esteem of youths and to implement other initiatives that would be expected to reduce gang participation, school dropout, and teen pregnancy rates. The Department shall facilitate collaboration between the Boys and Girls Clubs and Support Our Students, Communities in Schools, and similar programs and encourage them to submit joint applications for the funds if appropriate. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.25.(t)  The sum of nine hundred twenty‑five thousand eighty‑five dollars ($925,085) appropriated in this section in the Social Services Block Grant for the 2012‑2013 fiscal year to the Department of Health and Human Services, Division of Social Services, shall be used for maternity homes. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.25.(u)  The sum of one hundred fifty thousand dollars ($150,000) appropriated in this section in the Social Services Block Grant for the 2012‑2013 fiscal year to the Department of Health and Human Services, Division of Public Health, shall be allocated to Prevent Blindness North Carolina to be used for direct service programs. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.25.(v)  The sum of seventy‑five thousand dollars ($75,000) appropriated in this section in the Social Services Block Grant for the 2012‑2013 fiscal year to the Department of Health and Human Services, Division of Services for the Blind, shall be used to provide accessible electronic information for blind and disabled persons. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.25.(w)  The sum of three hundred seventy‑five thousand dollars ($375,000) appropriated in this section in the Social Services Block Grant for the 2012‑2013 fiscal year to the Department of Health and Human Services, Division of Social Services, shall be used to continue support for the Child Advocacy Centers and are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.25.(x)  Social Services Block Grant funds allocated for the 2012‑2013 fiscal year for child medical evaluations are exempt from the provisions of 10A NCAC 71R .0201(3).
SECTION 10.25.(y)  The sum of one million dollars ($1,000,000) appropriated in this section in the Social Services Block Grant for the 2012‑2013 fiscal year to the Department of Health and Human Services, Division of Social Services, shall be allocated to North Carolina Food Bank agencies to be used to purchase and distribute food staples for emergency food assistance. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).

LOW‑INCOME HOME ENERGY ASSISTANCE BLOCK GRANT
SECTION 10.25.(z)  Additional emergency contingency funds received may be allocated for Energy Assistance Payments or Crisis Intervention Payments without prior consultation with the Joint Legislative Commission on Governmental Operations. Additional funds received shall be reported to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division upon notification of the award. The Department of Health and Human Services shall not allocate funds for any activities, including increasing administration, other than assistance payments, without prior consultation with the Joint Legislative Commission on Governmental Operations.
SECTION 10.25.(aa)  The sum of fifteen million dollars ($15,000,000) appropriated in this section in the Low‑Income Home Energy Assistance Block Grant for the 2012‑2013 fiscal year to the Department of Health and Human Services, Division of Social Services, shall be used for energy assistance payments for the households of (i) elderly persons age 60 and above with income up to one hundred thirty percent (130%) of the federal poverty level and (ii) disabled persons eligible for services funded through the Division of Aging and Adult Services. County departments of social services shall submit to the Division of Social Services an outreach plan for targeting households with 60‑year‑old household members no later than August 1 of each year.

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
SECTION 10.25.(bb)  Payment for subsidized child care services provided with federal TANF funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.
SECTION 10.25.(cc)  If funds appropriated through the Child Care and Development Fund Block Grant for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order to use the federal funds fully.

MATERNAL AND CHILD HEALTH BLOCK GRANT
SECTION 10.25.(dd)  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104‑193 (42 U.S.C. § 710), for the 2012‑2013 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an abstinence until marriage education program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C‑81(e1)(4) and (4a). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.
SECTION 10.25.(ee)  The Department of Health and Human Services shall ensure that there will be follow‑up testing in the Newborn Screening Program.

PART XI. Department of Agriculture and Consumer Services

B.R.I.D.G.E. Youthful Offenders/Priority and Reporting
SECTION 11.1.(a)  The Division of Adult Correction of the Department of Public Safety shall give priority to the B.R.I.D.G.E. Youthful Offenders Program operated in cooperation with the North Carolina Forest Service when assigning youthful offenders from the Western Youth Institution to work programs.
SECTION 11.1.(b)  The North Carolina Forest Service shall submit an annual report on the B.R.I.D.G.E. Youthful Offenders Program no later than October 1 of each year beginning October 1, 2012, to the Fiscal Research Division, the Chairs of the House Appropriations Subcommittee on Natural and Economic Resources and the Senate Appropriations Committee on Natural and Economic Resources, the Chairs of the House Appropriations Subcommittee on Justice and Public Safety and the Senate Appropriations Committee on Justice and Public Safety, the Joint Legislative Commission on Governmental Operations, and the Joint Legislative Oversight Committee on Justice and Public Safety.  The report shall include the following information for the prior fiscal year:
(1)	The number of youthful offenders within the custody of the Division of Adult Correction eligible for B.R.I.D.G.E.
(2)	The number of youthful offenders participating in B.R.I.D.G.E.
(3)	The average daily participation in B.R.I.D.G.E.
(4)	The average duration of participation in B.R.I.D.G.E.
(5)	Summary of activities of B.R.I.D.G.E. participants.

Forest Fires/Annual Report
SECTION 11.2.  Article 75 of Chapter 106 of the General Statutes is amended by adding a new section to read:
"§ 106‑911.  Annual report on wildfires.
No later than October 1 of each year, beginning October 1, 2012, the Commissioner shall submit a written report on wildfires in the State to the chairs of the House Appropriations Subcommittee on Natural and Economic Resources and the Senate Appropriations Committee on Natural and Economic Resources, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division of the General Assembly. The report shall include the following information for all major or project wildfires during the prior fiscal year:
(1)	The date, location, and impacts (property damage and any casualties) from the wildfire.
(2)	The following data for firefighters and related support personnel involved in fighting the wildfire:
a.	Total overtime hours worked.
b.	Total compensation paid for overtime.
c.	The portion of compensation paid that was reimbursed to the State.
(3)	The fiscal impact of the wildfire, including total costs, reimbursable costs, and costs incurred by the State."

Southeastern North Carolina Agricultural Center and Farmers Market/Study Options
SECTION 11.3.(a)  The Department of Agriculture and Consumer Services shall study the operating model of the Southeastern North Carolina Agricultural Center and Farmers Market and recommend alternative operating models.  The alternative operating models should be evaluated based on a goal of limiting subsidies from State funds in support of facility operations to no more than fifty percent (50%) of the facility's operating budget. At a minimum, the Department should consider the following alternatives:
(1)	Changing the services provided, with particular emphasis on options for the retail farmers market.
(2)	Pooling staff, resources, and profits between the Center and other similar facilities operated by the Department.
(3)	Contracting with a private entity to operate the Center or some portion of the Center's operations.
(4)	If there is no operating model under which continued operation of the Center is viable with State subsidies limited to fifty percent (50%) or less of the Center's operating budget, options for closure of the Center and alternative uses of the property, including transfer of ownership of some or all of the facilities of the Center to a unit of local government.
SECTION 11.3.(b)  The Department shall report its findings and recommendations to the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division on or before February 1, 2013.

Research Stations nonreverting fund
SECTION 11.4.  Article 1 of Chapter 106 of the General Statutes is amended by adding a new section to read:
"§ 106‑6.3. Create special revenue fund for research stations.
The Research Stations Fund is established as a special revenue fund within the Department of Agriculture and Consumer Services, Division of Research Stations. This Fund shall consist of receipts from the sale of commodities produced on the Department's research stations and any gifts, bequests, or grants for the benefit of this Fund. No General Fund appropriations shall be credited to this Fund. Any balance remaining in this Fund at the end of any fiscal year shall not revert. The Department may use this Fund only to develop, improve, repair, maintain, operate, or otherwise invest in research stations operated by the Department's Research Station Division."

PART Xii. Department of Environment and Natural Resources

DENR Positions to staff Fossil Fuel oversight Body
SECTION 12.1.  Should the recommended legislation contained in the report of the Legislative Research Commission's Committee on Energy Policy Issues become law and require the Department of Environment and Natural Resources to provide staff to an Oil and Gas Board (or substantially similar fossil fuel oversight body), then the Department may fund the staff positions using savings from reclassifying and consolidating salaries, benefits, and associated operating costs from vacant positions and shall fill these reclassified and consolidated positions in a timely manner in order to provide support for implementation of the recommendations.

DENR to centralize oversight of its regional offices
SECTION 12.2.(a)  The Department of Environment and Natural Resources shall centralize and expand its oversight of the Department's regional offices by taking the following actions:
(1)	The Department shall create a mission statement for the regional offices.
(2)	In order to gather comparative data across the regional offices measuring their performance in carrying out their mission, the Department shall expand its existing performance measures pertinent to customer service delivery and process consistency. The expanded performance measures shall include time lines and milestones.
(3)	The Department shall implement a new customer survey during the 2012‑2013 fiscal year and use the findings of the survey to craft future goals for addressing customer service concerns. In order to consistently track customer service data, the survey shall be repeated every other year.
(4)	The Department shall conduct a review of its regional offices and divisions to identify best practices for ensuring consistency across the Department and create a plan for implementing those best practices across regional offices and divisions.
SECTION 12.2.(b)  The Department shall report no later than February 1, 2013, to the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division regarding (i) its progress, findings, and recommendations regarding the requirements of this section and (ii) its progress in establishing and implementing findings and recommendations regarding its operations from the public listening sessions conducted by the Department in 2011.

DRINKING WATER STATE REVOLVING FUND 
SECTION 12.3.  Notwithstanding G.S. 159G‑22, the Department of Environment and Natural Resources may transfer State funds from the Drinking Water Reserve to the Drinking Water State Revolving Fund for the 2012‑2013 fiscal year.  The funds shall be used to match maximum available federal grant moneys authorized by section 1453 of the federal Safe Drinking Water Act of 1996, 42 U.S.C. § 300j‑12, as amended.

TRANSFER GEODETIC SURVEY SECTION FROM DENR TO THE DIVISION OF EMERGENCY MANAGEMENT OF THE DEPARTMENT OF PUBLIC SAFETY
SECTION 12.4.(a)  All functions, powers, duties, and obligations previously vested in the Geodetic Survey Section of the Division of Land Resources of the Department of Environment and Natural Resources are transferred to and vested in the Division of Emergency Management of the Department of Public Safety by a Type I transfer, as defined in G.S. 143A‑6.
SECTION 12.4.(b)  G.S. 102‑1.1 reads as rewritten:
"§ 102‑1.1.  Name and description in relation to 1983 North American Datum.
From and after the date and time the North Carolina Geodetic Survey Section in the Division of Emergency Management of the Department of Public Safety receives from the National Geodetic Survey, official notice of a complete, published definition of the North American Datum of 1983 including the State plane coordinate constants applicable to North Carolina, the official survey base for North Carolina shall be a system of plane coordinates to be known as the "North Carolina Coordinate System of 1983," said system being defined as a Lambert conformal projection of the "Geodetic Reference System (GRS 80 Ellipsoid)" having a central meridian of 79° – 00' west from Greenwich and standard parallels of latitude of 34° – 20' and 36° – 10' north of the equator, along which parallels the scale shall be exact. All coordinates of the system are expressed in metres, the x coordinate being measured easterly along the grid and the y coordinate being measured northerly along the grid. The U.S. Survey Foot, 1 meter = 39.37 inches or 3.2808333333 feet, shall be used as a conversion factor. The origin of the coordinates is hereby established on the meridian 79° – 00' west from Greenwich at the intersection of the parallels 33° – 45' north latitude, such origin being given the coordinates x = 609,601.22 metres, y = 0 metres. The precise position of said system shall be as marked on the ground by triangulation or traverse stations or monuments established in conformity with the standards adopted by the National Geodetic Survey for first‑ and second‑order work, whose geodetic positions have been rigidly adjusted on the North American Datum of 1983, and whose plane coordinates have been computed on the system defined. Whenever plane coordinates are used in the description or identification of surface area or location within this State, the coordinates shall be identified as "NAD 83", indicating North American Datum of 1983, or as "NAD 27", indicating North American Datum of 1927."
SECTION 12.4.(c)  G.S. 102‑8 reads as rewritten:
"§ 102‑8.  Administrative agency.
The administrative agency of the North Carolina Coordinate System shall be the Department of Public Safety through its appropriate division hereinafter called the "agency.""
SECTION 12.4.(d)  G.S. 102‑10 reads as rewritten:
"§ 102‑10.  Prior work.
The system of stations, monuments, traverses, computations, and other work which has been done or is under way in North Carolina by the so‑called North Carolina Geodetic Survey, under the supervision of the United States Coast and Geodetic Survey, is, where consistent with the provisions of this Chapter, hereby made a part of the North Carolina Coordinate System. The surveys, notes, computations, monuments, stations, and all other work relating to the coordinate system, which has been done by said North Carolina Geodetic Survey, under the supervision of and in cooperation with the United States Coast and Geodetic Survey and federal relief agencies, hereby are placed under the direction of, and shall become the property of, the administrative agency. All persons or agencies having in their possession any surveys, notes, computations, or other data pertaining to the aforementioned coordinate system, shall turn over to the Department of Public Safety such data upon request."
SECTION 12.4.(e)  G.S. 102‑12 reads as rewritten:
"§ 102‑12.  Control system map.
The agency shall prepare for publication and cause to be published a map or maps setting forth the location of monuments for both horizontal and vertical control, together with such other pertinent data as the agency may direct for implementation of the North Carolina Coordinate System. The agency shall furnish such map or maps to any person or may make such charge as will defray the expense of printing and distribution. It shall be the responsibility of the agency to maintain this map, make revisions as often as necessary to provide up‑to‑date information and furnish up‑to‑date copies to the register of deeds of each county in the State."
SECTION 12.4.(f)  G.S. 47‑30(f) reads as rewritten:
"§ 47‑30.  Plats and subdivisions; mapping requirements.
…
(f)	Plat to Contain Specific Information. – Every plat shall contain the following specific information:
…
(9)	Where the plat is the result of a survey, one or more corners shall, by a system of azimuths or courses and distances, be accurately tied to and coordinated with a horizontal control monument of some United States or State Agency survey system, such as the North Carolina Geodetic Survey where the monument is within 2,000 feet of the subject property. Where the North Carolina Grid System coordinates of the monument are on file in the North Carolina Geodetic Survey Section in the Division of Emergency Management of the Department of Public Safety, the coordinates of both the referenced corner and the monuments used shall be shown in X (easting) and Y (northing) coordinates on the plat. The coordinates shall be identified as based on "NAD 83," indicating North American Datum of 1983, or as "NAD 27," indicating North American Datum of 1927. The tie lines to the monuments shall also be sufficient to establish true north or grid north bearings for the plat if the monuments exist in pairs. Within a previously recorded subdivision that has been tied to grid control, control monuments within the subdivision may be used in lieu of additional ties to grid control. Within a previously recorded subdivision that has not been tied to grid control, if horizontal control monuments are available within 2,000 feet, the above requirements shall be met; but in the interest of bearing consistency with previously recorded plats, existing bearing control should be used where practical. In the absence of grid control, other appropriate natural monuments or landmarks shall be used. In all cases, the tie lines shall be sufficient to accurately reproduce the subject lands from the control or reference points used.
…."
SECTION 12.4.(g)  Notwithstanding G.S. 147‑33.83, the North Carolina Geodetic Survey Section shall continue to provide free of charge to the Department of Environment and Natural Resources the services provided by the Section to the Department on or prior to the effective date of this act, including the following:
(1)	Surveying assistance and expertise, including all of the following:
a.	Review of survey plats related to development proposals, remediation activities, and redevelopment of contaminated sites.
b.	Establishment of oyster lease boundaries.
c.	Surveys of submerged lands.
d.	Survey activities required to establish the location of mean high water.
(2)	Providing surveying assistance and expertise to the Department of Justice related to DENR cases, including expert testimony in administrative contested cases or judicial proceedings.
(3)	Providing technical training and assistance to DENR agencies in surveying and in the use of GPS and GPS software.
(4)	Reviewing proposed purchases of GPS equipment by DENR agencies.
(5)	Surveying lands managed by or lands proposed for acquisition by DENR agencies.
SECTION 12.4.(h)  The Revisor of Statutes shall make the conforming statutory changes necessary to reflect the transfer under this section. The Revisor of Statutes may, where necessitated by this section, correct any reference in the General Statutes and make any other conforming changes.
SECTION 12.4.(i)  Any references in this act to the North Carolina Geodetic Survey Section of the Division of Land Resources of the Department of Environment and Natural Resources shall be construed to refer to the North Carolina Geodetic Survey Section of the Division of Emergency Management of the Department of Public Safety.

Prohibit the Construction of New Piers/Satellite Areas
SECTION 12.5.(a)  G.S. 143B‑289.44(b) reads as rewritten:
"(b)	Fund. – The North Carolina Aquariums Fund is hereby created as a special and nonreverting fund. The North Carolina Aquariums Fund shall be used for repair, renovation, expansion, maintenance, educational exhibit construction, and operational expenses at existing aquariums, to pay the debt service and lease payments related to the financing of expansions of aquariums, and to match private funds that are raised for these purposes."
SECTION 12.5.(b)  Notwithstanding G.S. 143B‑289.44(b), as rewritten by subsection  (a) of this section, the North Carolina Aquariums Fund may continue to be used for the North Carolina Aquarium Pier at Nags Head.
SECTION 12.5.(c)  Part 5C of Article 7 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑289.45.  Satellite areas prohibited absent General Assembly authorization.
Notwithstanding any other provision of law, State funds shall not be used for any of the following purposes unless specifically authorized by the General Assembly:
(1)	Construction of any satellite area.
(2)	Commencement of any capital project in connection with the construction or acquisition of any satellite area.
(3)	Operation of any satellite area.
For purposes of this section, the term "satellite area" means any property or facility that is to be operated by the Division of North Carolina Aquariums that is located somewhere other than on the site of the aquariums at Pine Knoll Shores, Roanoke Island, and Fort Fisher."
SECTION 12.5.(d)  Notwithstanding G.S. 143B‑289.45, as enacted by subsection (c) of this section, the Division of North Carolina Aquariums may continue to operate the North Carolina Aquarium Pier at Nags Head.
SECTION 12.5.(e)  This section is effective when it becomes law.

Wildlife Resources Commission Budget
SECTION 12.6. The Office of State Budget and Management, the State Controller, the Fiscal Research Division, and the Wildlife Resources Commission shall study the impacts of using Budget Code 14350 for budgeting the expenditures and receipts of any Wildlife Resources Commission programs that utilize General Fund appropriations. The Department shall report on the study no later than October 1, 2012, to the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division.

Clean Water Management Trust Fund
SECTION 12.7.(a)  Notwithstanding the provisions of G.S. 113A‑253(d), the sum of three million dollars ($3,000,000) shall be used for the 2012‑2013 fiscal year for the costs of administering the Clean Water Management Trust Fund, including costs to support the Board of Trustees of the Clean Water Management Trust Fund and its staff, the operating costs of the Board of Trustees of the Clean Water Management Trust Fund and its staff, and the costs of making debt payments to retire debt as provided under G.S. 113A‑253(c).
SECTION 12.7.(b)  The Board of Trustees of the Fund shall give priority consideration to any Clean Water Management Trust Fund application requesting State matching funds for infrastructure programs and for the Readiness and Environmental Protection Initiative or any other United States Department of Defense program that provides for military buffers and protects the overall military training mission.

Aquarium Budgeting Clarification
SECTION 12.8.  The Department of Environment and Natural Resources shall budget all line items related to daily operations of the State aquariums in Budget Code 14300.  The Department may continue to use Budget Code 24300 for special events, activities, debt service, and other items not related to daily operations of the State aquariums.

PART XIII. Department of Commerce

NER BLOCK GRANTS
SECTION 13.1.  Section 14.1 of S.L. 2011‑145 reads as rewritten:
"SECTION 14.1.(a)  Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2013, according to the following schedule:

COMMUNITY DEVELOPMENT BLOCK GRANT

01.	State Administration	$	1,000,000

03.	Scattered Site Housing	7,200,000

04.	Economic Development	7,000,000

05.	Small Business/Entrepreneurship	2,500,000

06.	NC Catalyst	4,500,000

07.	Infrastructure	20,300,000

TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT – 2013 Program Year		$42,500,000
"SECTION 14.1.(b)  Decreases in Federal Fund Availability. – If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.
"SECTION 14.1.(c)  Increases in Federal Fund Availability for Community Development Block Grant. – Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows: each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.
"SECTION 14.1.(d)  Limitations on Community Development Block Grant Funds. – Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State Administration;  up to seven million two hundred thousand dollars ($7,200,000) may be used for Scattered Site Housing; up to seven million dollars ($7,000,000) may be used for Economic Development; up to two million five hundred thousand dollars ($2,500,000) may be used for Small Business/Entrepreneurship; up to four million five hundred thousand dollars ($4,500,000) shall be used for NC Catalyst; up to twenty million three hundred thousand dollars ($20,300,000) may be used for Infrastructure. If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.
"SECTION 14.1.(e)  The Department of Commerce shall consult with the Joint Legislative Commission on Governmental Operations prior to reallocating Community Development Block Grant Funds. Notwithstanding the provisions of this subsection, whenever the Director of the Budget finds that:
(1)	A reallocation is required because of an emergency that poses an imminent threat to public health or public safety, the Director of the Budget may authorize the reallocation without consulting the Commission. The Department of Commerce shall report to the Commission on the reallocation no later than 30 days after it was authorized and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency.
(2)	The State will lose federal block grant funds or receive less federal block grant funds in the next fiscal year unless a reallocation is made, the Department of Commerce shall provide a written report to the Commission on the proposed reallocation and shall identify the reason that failure to take action will result in the loss of federal funds. If the Commission does not hear the issue within 30 days of receipt of the report, the Department may take the action without consulting the Commission.
"SECTION 14.1.(f)  By September 1, 2012, the Division of Community Assistance, Department of Commerce, shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the use of Community Development Block Grant Funds appropriated in the prior fiscal year. The report shall include the following:
(1)	A discussion of each of the categories of funding and how the categories were selected, including information on how a determination was made that there was a statewide need in each of the categories.
(2)	Information on the number of applications that were received in each category and the total dollar amount requested in each category.
(3)	A list of grantees, including the grantee's name, county, category under which the grant was funded, the amount awarded, and a narrative description of the project.
"SECTION 14.1.(g)  For purposes of this section, eligible activities under the category of Infrastructure in subsection (a) of this section are limited to the installation of public water or sewer lines and improvements to water or sewer treatment plants that have specific problems such as being under moratoriums or special orders of consent. Notwithstanding the provisions of subsection (e) of this section, funds allocated to the Infrastructure category in subsection (a) of this section shall not be reallocated to any other category."

DEPARTMENT OF COMMERCE/TRAVEL EXPENSES
SECTION 13.2.  The Department of Commerce shall not provide per diem, subsistence, or travel allowances for any State employee who is not an employee of the Department. Nothing in this section shall prohibit a member of a State board or commission, State officer or employee, or member of the General Assembly who travels on official business with an employee of the Department of Commerce from receiving per diem, subsistence, and travel allowances from their respective board or commission, department, or agency at the rate set forth in G.S. 138‑5, 138‑6, and 120‑3.1.

NC SMALL BUSINESS CONTRACTOR AUTHORITY/reporting requirement
SECTION 13.3.  G.S. 143B‑472.102 reads as rewritten:
"§ 143B‑472.102.  Authority creation; powers.
…
(j)	Powers and Duties. – The Authority has the following powers and duties:
…
(9)	To report quarterly to the Joint Legislative Commission on Governmental Operations on the activities of the Authority, including the amount of rates, sureties, and bonds. The Authority shall comply with the provisions of this subdivision only in the fiscal years in which funds are appropriated by the State to the Authority to perform the powers and duties authorized in this Part.
…."

DEPARTMENT OF COMMERCE/CHANGES TO STATUTORY REPORTING REQUIREMENTS
SECTION 13.4.(a)  G.S. 143B‑434.01 reads as rewritten:
"§ 143B‑434.01.  Comprehensive Strategic Economic Development Plan.
…
(e)	Environmental Scan. – The first step in developing the Plan shall be to develop an environmental scan based on the input from economic development parties and the public and on information about the economic environment in North Carolina. To prepare the scan, the Board shall gather the following information and ensure that the information is updated periodically. The updated information may be provided in whatever format and through whatever means is most efficient.
…
(f)	
…
(k)	Annual Evaluation. – The Board shall annually evaluate the State's economic performance based upon the statistics listed in this subsection and upon the Board's stated goals and objectives in its Plan. The statistics upon which the evaluation is made should be available to policymakers. The information may be provided in whatever format and through whatever means is most efficient.

…
	(l)	Accountability. – The Board shall make all data, plans, and reports available to the General Assembly, the Joint Legislative Commission on Governmental Operations, the Joint Legislative Economic Development and Global Engagement Oversight Committee, the Senate Appropriations Committee on Natural and Economic Resources, and the House of Representatives Appropriations Subcommittee on Natural and Economic Resources at appropriate times and upon request. The Board shall prepare and make available on an annual basis public reports on each of the major sections of the Plan and the Annual Report indicating the degree of success in attaining each development objective."
SECTION 13.4.(b)  G.S. 143B‑435.1 reads as rewritten:
"§ 143B‑435.1.  Clawbacks.
…
(d)	Report. – By April 1 and October 1 of each year, the Department of Commerce shall report to the Revenue Laws Study  Committee, the Joint Legislative Commission on Governmental Operations, the Senate Appropriations Committee on Natural and Economic Resources, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, and the Fiscal Research Division of the General Assembly on all clawbacks that have been triggered under programs it administers and its progress on obtaining repayments. The report must include the name of each business, the event that triggered the clawback, and the amount forfeited or to be repaid."
SECTION 13.4.(c)  G.S. 143B‑437.01(c) is repealed.
SECTION 13.4.(d)  G.S. 143B‑437.07 reads as rewritten:
"§ 143B‑437.07.  Economic development grant reporting.
(a)	Report. – The Department of Commerce must publish on or before October 1 of each year the information required by this subsection, itemized by business entity, for each business or joint private venture to which the State has, in whole or in part, granted one or more economic development incentives during the previous fiscal year. The information in the report must include all of the following:
…
(b)	Online Posting/Written Submission. – The Department of Commerce must post on its Internet Web site a summary of the report compiled in subsection (a) of this section. The summary report must include the information required by subdivisions (2), (9), (11), and (12) of subsection (a) of this section. By October 1 of each year, the Department of Commerce must submit the written report required by subsection (a) of this section to the Joint Legislative Commission on Governmental Operations, the Revenue Laws Study Committee, the Senate Appropriations Committee on Natural and Economic Resources, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, and the Fiscal Research Division of the General Assembly.
(c)	Economic Development Incentive. – An economic development incentive includes any grant from the following programs: Job Development Investment Grant Program; the Job Maintenance and Capital Development Fund; One North Carolina Fund; and the Industrial Development Fund, including the Utility Account. The State also incents economic development through the use of tax expenditures in the form of tax credits and refunds. The Department of Revenue must report annually on these statutory economic development incentives, as required under G.S. 105‑256."
SECTION 13.4.(e)  G.S. 143B‑437.08 is amended by adding a new subsection to read:
"§ 143B‑437.08.  Development tier designation.
…
(k)	Report. – By November 30 of each year, the Secretary of Commerce shall submit a written report to the Joint Legislative Commission on Governmental Operations, the Senate Appropriations Committee on Natural and Economic Resources, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, and the Fiscal Research Division of the General Assembly on the tier rankings required by subsection (c) of this section, including a map of the State whereupon the tier ranking of each county is designated."
SECTION 13.4.(f)  G.S. 143B‑437.55(d) is repealed.

ONE NORTH CAROLINA FUND
SECTION 13.5.  Section 14.2(a) of S.L. 2011‑145 reads as rewritten:
"SECTION 14.2.(a)  Of the funds appropriated in this act to the One North Carolina Fund for the 2012‑2013 fiscal year, the Department of Commerce may use up to two hundred fifty thousand dollars ($250,000) to cover its expenses in administering the One North Carolina Fund and other economic development incentive grant programs during the 2012‑2013 fiscal year. The Department of Commerce shall not use more than two hundred fifty thousand dollars ($250,000) for administrative costs in any one fiscal year."

Align One North Carolina Fund with JDIG Program
SECTION 13.6.(a)  The General Assembly acknowledges the importance of ongoing economic growth and development in this State.  To that end, it is the intent of the General Assembly to fully fund all of the commitments of the One North Carolina Fund, as evidenced by the General Assembly's past and recurring appropriations to the Fund and as set forth in this section, and to establish a funding structure that aligns with the funding structure that is and has been used with the Job Development Investment Grant Program.  The General Assembly has continued this level of commitment while remaining fiscally responsible in addressing the other critical, high‑priority needs of the State.
SECTION 13.6.(b)  G.S. 143B‑437.71 is amended by adding a new subsection to read:
"(b1)	Awards. – The maximum amount of total annual liability for grants awarded in any single calendar year under this Part is fourteen million dollars ($14,000,000).  No agreement may be entered into that, when considered together with other existing agreements governing grants awarded during a single calendar year, could cause the State's potential total annual liability for grants awarded in a single calendar year to exceed this amount."
SECTION 13.6.(c)  G.S. 143B‑437.72(b) is amended by adding a new subdivision to read:
"(b)	Company Performance Agreements. – An agreement between a local government and a grantee business must contain the following provisions:
(1)	A commitment to create or retain a specified number of jobs within a specified salary range at a specific location and commitments regarding the time period in which the jobs will be created or retained and the minimum time period for which the jobs must be maintained.
(2)	A commitment to provide proof satisfactory to the local government and the State of new jobs created or existing jobs retained and the salary level of those jobs.
(3)	A provision that funds received under the agreement may be used only for a purpose specified in G.S. 143B‑437.71(b).
(4)	A provision allowing the State or the local government to inspect all records of the business that may be used to confirm compliance with the agreement or with the requirements of this Part.
(5)	A provision establishing the method for determining compliance with the agreement.
(6)	A provision establishing a schedule for disbursement of funds under the agreement that allows disbursement of funds only in proportion to the amount of performance completed under the agreement.
(6a)	A provision establishing that a business that has completed performance and become entitled to a disbursement of funds under the agreement must timely request, in writing to the local government, a disbursement of funds within one year from the date of completed performance or forfeit the disbursement.
(7)	A provision requiring recapture of grant funds if a business subsequently fails to comply with the terms of the agreement.
(8)	Any other provision the State or the local government finds necessary to ensure the proper use of State or local funds."
SECTION 13.6.(d)  G.S. 143B‑437.72(d) reads as rewritten:
"(d)	Disbursement of Funds. – Funds may be disbursed from the One North Carolina Fund to the local government only after (i) a business has completed performance and is entitled to a disbursement of funds under the agreement and has requested, in writing to the local government no later than February 1 following the year of completed performance, a disbursement of funds and (ii) the local government has reported to the Secretary of Commerce no later than March 1 following the year of completed performance the total amount of disbursements that have been claimed by businesses in writing during the previous year and has demonstrated that the business has complied with the terms of the company performance agreement. The State shall disburse funds allocated under the One North Carolina Fund to a local government no later than August 1 following the year of completed performance in an amount equal to that which the local government reported as having been claimed by businesses in writing during the previous year and demonstrated were due to be disbursed as a result of compliance by the businesses with the terms of the company performance agreements. Disbursements by the State to a local government from the One North Carolina Fund shall be made in one annual payment."
SECTION 13.6.(e)  G.S. 143B‑437.74 reads as rewritten:
"§ 143B‑437.74.  Reports; study.
(a)	Reports. – The Department of Commerce shall publish a report on the use of funds in the One North Carolina Fund at the end of each fiscal quarter. The report shall contain information on the commitment, disbursement, and use of funds allocated under the One North Carolina Fund. The report is due no later than one month after the end of the fiscal quarter and must be submitted to the following:
(1)	The Joint Legislative Commission on Governmental Operations.
(2)	The chairs of the House of Representatives and Senate Finance Committees.
(3)	The chairs of the House of Representatives and Senate Appropriations Committees.
(4)	The Fiscal Research Division of the General Assembly.
(b)	Study. – The Department of Commerce shall conduct a study to determine the minimum funding level required to implement the One North Carolina Fund successfully. The Department shall report the results of this study to the House of Representatives Finance Committee, the Senate Finance Committee, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division no later than April 1 of each year."
SECTION 13.6.(f)  Part 2H of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑437.75.  Cash flow requirements.
Notwithstanding any other provision of law, moneys allocated from the One North Carolina Fund shall be budgeted and funded on a cash flow basis. The Office of State Budget and Management shall periodically transfer funds from the One North Carolina Fund established pursuant to G.S. 143B‑437.71 to the Department of Commerce in an amount sufficient to satisfy Fund allocations to be transferred pursuant to G.S. 143B‑437.72 to be paid during the fiscal year."
SECTION 13.6.(g)  Article 9 of Chapter 143C of the General Statutes is amended by adding a new section to read:
"§ 143C‑9‑7.  One North Carolina Fund Reserve.
(a)	The State Controller shall establish a reserve in the General Fund to be known as the One North Carolina Fund Reserve. Funds from the One North Carolina Fund Reserve shall not be expended or transferred except in accordance with G.S. 143B‑437.75.
(b)	It is the intent of the General Assembly to appropriate funds annually to the One North Carolina Fund Reserve established in this section in amounts sufficient to meet the anticipated cash requirements for each fiscal year of the One North Carolina Fund Program established pursuant to G.S. 143B‑437.71."
SECTION 13.6.(h)  G.S. 143B‑437.52 reads as rewritten:
"§ 143B‑437.52.  Job Development Investment Grant Program.
…
(b)	Priority. –In selecting between applicants, a project that is located in an Eco‑Industrial Park certified under G.S. 143B‑437.08 has priority over a comparable project that is not located in a certified Eco‑Industrial Park.
(c)	Awards. – The maximum amount of total annual liability for grants awarded in any single calendar year under this Part, including amounts transferred to the Utility Account pursuant to G.S. 143B‑437.61, is fifteen million dollars ($15,000,000). No agreement may be entered into that, when considered together with other existing agreements governing grants awarded during a single calendar year, could cause the State's potential total annual liability for grants awarded in a single calendar year to exceed this amount.
…."
SECTION 13.6.(i)  This section becomes effective July 1, 2012.

INDUSTRIAL COMMISSION FEES/COMPUTER SYSTEM REPLACEMENT
SECTION 13.7.  Section 14.8 of S.L. 2011‑145 reads as rewritten:
"SECTION 14.8.  For the 2012‑2013 fiscal year, the North Carolina Industrial Commission shall retain the additional revenue generated as a result of an increase in the fee charged to parties for the filing of compromised settlements. These funds shall be used for the purpose of replacing existing computer hardware and software used for the operations of the Commission. These funds may also be used to prepare any assessment of hardware and software needs prior to purchase and to develop and administer the needed databases and new Electronic Case Management System, including the establishment of two time‑limited positions for application development and support and mainframe migration. The Commission may not retain any fees under this section unless they are in excess of the former two‑hundred‑dollar ($200.00) fee charged by the Commission for filing a compromised settlement."

EMPLOYMENT SECURITY RESERVE FUND
SECTION 13.8.  Funds from the Employment Security Reserve Fund shall be used by the Department of Commerce, Division of Employment Security, only for the following purposes:  (i) to pay the interest on the two billion eight hundred million dollars ($2,800,000,000) in debt liability for unemployment insurance benefits currently owed to the federal government; and (ii) to pay down the principal amount of two billion eight hundred million dollars ($2,800,000,000) in debt liability for unemployment insurance benefits currently owed to the federal government.  The Department of Commerce, Division of Employment Security, shall not use funds from the Employment Security Reserve Fund for any purpose not explicitly authorized in this section.

WORKER TRAINING TRUST FUND
SECTION 13.9.  Of the funds appropriated in this act to the Department of Commerce for the Worker Training Trust Fund, the sum of seventy‑five thousand dollars ($75,000) in nonrecurring funds for the 2012‑2013 fiscal year is allocated to the North Carolina Rural Entrepreneurship through Action Learning (NC REAL) to support curriculum development, materials, and training for Small Business Centers.

COUNCIL OF GOVERNMENT FUNDS
SECTION 13.10.  Section 14.12A(a) of S.L. 2011‑145 reads as rewritten:
"SECTION 14.12A.(a)  Of the funds appropriated in this act to the Department of Commerce, the sum of three hundred forty‑three thousand one hundred eighty‑seven dollars ($343,187) for the 2011‑2012 fiscal year and the sum of  three hundred thirty‑eight thousand thirty‑nine dollars ($338,039) for the 2012‑2013 fiscal year shall be used only as provided by this section. Each regional council of government or lead regional organization is allocated up to twenty‑five thousand dollars ($25,000) for the 2011‑2012 and the 2012‑2013 fiscal years."

GRASSROOTS SCIENCE PROGRAM
SECTION 13.11.  Section 14.11(b) of S.L. 2011‑145 reads as rewritten:
"SECTION 14.11.(b)  Of the funds appropriated in this act to the Department of Commerce for State Aid, the sum of two million eight hundred ninety‑nine thousand eight hundred eighty‑five dollars ($2,899,885) for the 2011‑2012 fiscal year and the sum of two million eight hundred fifty‑six thousand three hundred eighty‑seven dollars ($2,856,387) for the 2012‑2013 fiscal year is allocated as grants‑in‑aid for each fiscal year as follows:
	2011‑2012	2012‑2013

Aurora Fossil Museum	$49,000	$49,000
Cape Fear Museum	$132,125		$129,877
Carolina Raptor Center	$92,050		$90,484
Catawba Science Center	$120,100		$118,057
Colburn Earth Science Museum, Inc.	$61,170		$60,129
Core Sound Waterfowl Museum	$49,000	$49,000
Discovery Place	$543,945		$534,691
Eastern NC Regional Science Center	$49,000	$49,000
Fascinate‑U	$66,530		$65,398
Granville County Museum Commission,
Inc.–Harris Gallery	$49,000	$49,000
Greensboro Children's Museum	$110,845		$108,959
The Health Adventure Museum of Pack
Place Education, Arts and
Science Center, Inc.	$127,695		$125,523
Highlands Nature Center	$65,050		$63,943
Imagination Station	$70,600		$69,399
The Iredell Museums, Inc.	$50,310		$49,454
Kidsenses	$66,700		$65,565
Museum of Coastal Carolina	$64,025		$62,936
The Natural Science Center 
of Greensboro, Inc.	$152,920		$150,319
North Carolina Museum of Life
and Science	$311,685		$306,383
Pisgah Astronomical Research Institute	$49,000	$49,000
Port Discover: Northeastern
North Carolina's Center for
Hands‑On Science, Inc.	$49,000	$49,000
Rocky Mount Children's Museum	$59,290		$58,281
Schiele Museum of Natural History
and Planetarium, Inc.	$188,370		$185,166
Sci Works Science Center and
Environmental Park of Forsyth County	$120,215		$118,170
Sylvan Heights Waterfowl Park
and Eco‑Center	$49,000	$49,000
Western North Carolina Nature Center	$92,630		$91,054
Wilmington Children's Museum	$60,630		$59,599

Total	$2,899,885		$2,856,387."

REGIONAL ECONOMIC DEVELOPMENT COMMISSIONS ALLOCATIONS
SECTION 13.12.  Section 14.13 of S.L. 2011‑145, as amended by Section 37 of S.L. 2011‑391, reads as rewritten:
"REGIONAL ECONOMIC DEVELOPMENT COMMISSIONS ALLOCATIONS
"SECTION 14.13.(a)  Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Partnership, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, North Carolina's Eastern Region Economic Development Partnership, and Carolinas Partnership, Inc.
"SECTION 14.13.(b)  Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:
(1)	First, the Department shall establish each commission's allocation by determining the sum of allocations to each county that is a member of that commission. Each county's allocation shall be determined by dividing the county's development factor by the sum of the development factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation. As used in this subdivision, the term "development factor" means a county's development factor as calculated under G.S. 143B‑437.08; and
(2)	Next, the Department shall subtract from funds allocated to the North Carolina's Eastern Region Economic Development Partnership the sum of  one hundred sixty‑one thousand eight hundred sixty‑one dollars ($161,861) in the  2012‑2013 fiscal year, which sum represents (i) the total interest earnings in the prior fiscal year on the estimated balance of the seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws and (ii) the total interest earnings in the prior fiscal year on loans made from the seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and
(3)	Next, the Department shall redistribute the sum of  one hundred sixty‑one thousand eight hundred sixty‑one dollars ($161,861)  in the  2012‑2013 fiscal year to the seven regional economic development commissions named in subsection (a) of this section. Each commission's share of this redistribution shall be determined according to the development factor formula set out in subdivision (1) of this subsection. This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection.
"SECTION 14.13.(c)  No more than one hundred twenty thousand dollars ($120,000) in State funds shall be used for the annual salary of any one employee of a regional economic development commission.
"SECTION 14.13.(d)  The General Assembly finds that successful economic development requires the collaboration of the State, regions of the State, counties, and municipalities. Therefore, the regional economic development commissions are encouraged to seek supplemental funding from their county and municipal partners to continue and enhance their efforts to attract and retain business in the State."

RURAL CENTER/RURAL JOBS FUND
SECTION 13.13.  Section 14.20(d) of S.L. 2011‑145 reads as rewritten:
"SECTION 14.20.(d)  Rural Jobs Infrastructure Grants. – A Rural Jobs Infrastructure Grant is available to supplement other funds to be applied to the construction or installation costs of an eligible project. Other funds contributed to the project may include federal funds, State funds, and local funds, including contributions from private sector enterprises that may benefit from the proposed improvements. A Rural Jobs Infrastructure Grant is subject to the following provisions:
(1)	Eligibility. – A local government unit is eligible for a Rural Jobs Infrastructure Grant if it is a rural county or is located in a rural county.
(2)	Maximum grant amount. – Grant funds shall be available based upon the number of private sector jobs to be created as a result of the investment from the Rural Jobs Infrastructure Grant Fund. An applicant for a grant may request up to five thousand dollars ($5,000) per job to be created. An applicant for a Rural Jobs Infrastructure Grant shall not receive more than five hundred thousand dollars ($500,000) for a proposed infrastructure project. Notwithstanding the provisions of this subdivision, the Rural Center may, if it deems it reasonable and appropriate based upon the number of private sector jobs created and/or the anticipated benefits to the community, award grant funds to a local government that exceed five thousand dollars ($5,000) per job to be created, provided that the average amount of the total grant funds from the funds appropriated in subsection (a) of this section does not exceed five thousand dollars ($5,000) per job to be created.
(3)	Matching funds. – A local government unit shall match a Rural Jobs Infrastructure Grant on a dollar‑for‑dollar basis. As part of the matching funds, recipients of grant funds under the provisions of this section shall contribute a cash match for the grant that is equivalent to at least five percent (5%) of the grant amount. The required applicant cash‑matching contribution shall come from local resources and may not be derived from other State or federal grant funds or from funds provided by the Rural Center."

RURAL ECONOMIC DEVELOPMENT CENTER/INFRASTRUCTURE PROGRAM
SECTION 13.14.  Section 14.17(c) of S.L. 2011-145 reads as rewritten:
"SECTION 14.17.(c)  For the 2012-2013 fiscal year, the Rural Center may use up to four percent (4%) of the funds appropriated in this section to cover its expenses in administering the North Carolina Economic Infrastructure Program."

PART XiV. Department of PUBLIC SAFETY

DIVISION OF ADULT CORRECTION/RELEASE DATES
SECTION 14.1.  Notwithstanding any other provision of law, the Division of Adult Correction may establish more than two release dates per month for inmates leaving prison.

INMATE MEDICAL costs
SECTION 14.2.(a)  Section 19.20 of S.L. 2009‑451 is repealed.
SECTION 14.2.(b)  Section 18.10(a) of S.L. 2011‑145 reads as rewritten:
"SECTION 18.10.(a)  During the 2011‑2013 fiscal biennium, the Department of Public Safety shall reimburse those providers and facilities providing approved inmate medical services outside the correctional facility the lesser amount of either a rate of seventy percent (70%) of the provider's then‑current prevailing charge or two times the then‑current Medicaid rate for any given service. The Department shall have the right to audit any given provider to determine the actual prevailing charge to ensure compliance with this provision.
This section does apply to vendors providing services that are not billed on a fee‑for‑service basis, such as temporary staffing. Nothing in this section shall preclude the Department from contracting with a provider for services at rates that provide greater documentable cost avoidance for the State than do the rates contained in this section or at rates that are less favorable to the State but that will ensure the continued access to care."
SECTION 14.2.(c)  Section 18.10(d) of S.L. 2011‑145 reads as rewritten:
"SECTION 18.10.(d)  The Division of Adult Correction shall report to the Joint Legislative Oversight Committee on Justice and Public Safety and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety no later than November 1, 2012, and quarterly thereafter on:
(1)	The volume of services provided by community medical providers that can be scheduled in advance and, of that volume, the percentage of those services that are provided by contracted providers.
(2)	The volume of services provided by community medical providers that cannot be scheduled in advance and, of that volume, the percentage of those services that are provided by contracted providers.
(3)	The volume of services provided by community medical providers that are emergent cases requiring hospital admissions and the emergent cases not requiring hospital admissions.
(4)	The volume of inpatient medical services provided to Medicaid‑eligible inmates, the cost of treatment, and the estimated savings of paying the nonfederal portion of Medicaid for the services.
(5)	The status of the Division's efforts to contract with hospitals to provide secure wards in each of the State's five prison regions."

TECHNICAL REVOCATION CENTER STUDY
SECTION 14.3.  The Division of Adult Correction of the Department of Public Safety shall study the feasibility of creating a technical violation center to house probationers ordered to serve a period of 90 days in confinement due to a technical violation of the condition of their probation. The study would determine the feasibility and cost‑effectiveness of using such a center operated by the Community Corrections Section for confinements resulting from technical corrections rather than placing the probationers in State prison facilities. The Department shall report its findings and recommendations to the Office of State Budget and Management and the House and Senate Appropriations Subcommittees on Justice and Public Safety no later than January 1, 2013.

STATE FUNDS MAY BE USED AS FEDERAL MATCHING FUNDS
SECTION 14.4.  Funds appropriated in this act to the Department of Public Safety for the Division of Juvenile Justice for the 2012‑2013 fiscal year may be used as matching funds for the Juvenile Accountability Incentive Block Grants. If North Carolina receives Juvenile Accountability Incentive Block Grants or a notice of funds to be awarded, the Office of State Budget and Management and the Governor's Crime Commission shall consult with the Division of Juvenile Justice regarding the criteria for awarding federal funds.  The Office of State Budget and Management, the Governor's Crime Commission, and the Division of Juvenile Justice shall report to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and to the Joint Legislative Commission on Governmental Operations prior to allocation of the federal funds.  The report shall identify the amount of funds to be received for the 2012‑2013 fiscal year and the allocation of funds by program and purpose.  Any Juvenile Accountability Incentive Block Grant awarded to North Carolina is subject to the provisions of G.S. 143C‑7‑1 and shall not obligate the State financially in future fiscal years.

Repeal requirement regarding the staffing Treatment model at youth development centers
SECTION 14.5.  Section 17.7 of S.L. 2011‑145 is repealed.

MULTIPURPOSE GROUP HOME FUNDS
SECTION 14.6.  Of the funds appropriated in this act to the Department of Public Safety for the Division of Juvenile Justice, the sum of five hundred fifty thousand dollars ($550,000) shall be used to continue operating a multipurpose group home in Craven County.

Juvenile Crime Prevention Council Funds
SECTION 14.7.  Section 17.4(b) of S.L. 2011‑145 reads as rewritten:
"SECTION 17.4.(b)  Of the funds appropriated by this act for the 2012‑2013 fiscal year to the Department of Public Safety for Juvenile Crime Prevention Council grants, the sum of one hundred twenty‑one thousand six hundred dollars ($121,600) shall be transferred to Project Challenge North Carolina, Inc., to be used for the continued support of Project Challenge programs throughout the State."

STRATEGIC PLAN FOR FACILITY CLOSURE, CONSTRUCTION, AND REPAIR
SECTION 14.8.  The Department of Public Safety shall study the population dynamics of detention and secure confinement at the Youth Development Centers operated by the Department and shall submit a strategic plan for facility closure, construction, and repair and renovation to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by February 1, 2013. The strategic plan required by this section shall include cost estimates for any proposed projects.

PART XV. Department of Justice

Itemized Billing for Legal Services Provided to State Agencies
SECTION 15.1.  Article 1 of Chapter 114 of the General Statutes is amended by adding a new section to read:
"§ 114‑8.5.  Itemized billing for legal services provided to State agencies.
Whenever the Department of Justice charges a State agency, board, or commission for legal services rendered by the Department, the Department shall do so by providing the agency, board, or commission with an invoice that includes at least all of the following information for all charges:
(1)	The case for which the agency, board, or commission is being charged.
(2)	The name of each attorney who worked on each case and the number of hours worked by each attorney.
(3)	The hourly rate being charged by each attorney."

Biannual Reporting on Attorney Activity
SECTION 15.2. Beginning on February 1, 2013, and every six months thereafter, the Attorney General shall report on the work of Department of Justice attorneys during the previous two quarters. The reports required by this section shall be filed with the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety and with the Fiscal Research Division of the General Assembly as follows:
(1)	Agency‑specific work. – A report on the work of Department of Justice attorneys for State agencies. This report shall include at least all of the following information:
a.	The amount of time spent working for each State department and agency.
b.	The amount of time spent on each case for each State department and agency.
c.	The amount billed to each State agency for the legal services provided.
(2)	Other work. – A report on the work of Department of Justice attorneys that is not on behalf of a particular State agency. The report required by this subdivision shall include all of the information required by subdivision (1) of this section. The report shall include at least all of the following information:
a.	The amount of time spent by each unit of the Department of Justice.
b.	The amount of time spent on each particular matter for each unit of the Department of Justice.

Consolidate Office of Managed Care Patient Assistance Program by Transferring the Department of Justice, Health Insurance Consumer Protection Unit, to the Department of Insurance
SECTION 15.3.(a)  The Department of Justice, Health Insurance Consumer Protection Unit, and any portion of the Managed Care Patient Assistance Program managed by the Department of Justice is transferred to the Department of Insurance. This transfer shall have all of the elements of a Type I transfer, as described in G.S. 143A‑6.
SECTION 15.3.(b)  G.S. 143‑730(a) reads as rewritten:
"(a)	The Office of Managed Care Patient Assistance Program is established in  the Department of Insurance."

PART XVI. Judicial Department

STUDY MANAGEMENT OF MAGISTRATE SCHEDULES
SECTION 16.1.  The Administrative Office of the Courts shall study the management of magistrate schedules throughout the General Court of Justice and make recommendations to (i) provide for more efficient use of the magistrates established for each county; and (ii) ensure that each county has sufficient coverage to adequately respond to law enforcement and the public. The Administrative Office of the Courts shall report its finding and recommendations to the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety by March 1, 2013.

FAMILY COURT PROGRAMS
SECTION 16.2.  The Administrative Office of the Courts shall provide direction and oversight to the existing family court programs in order to ensure that each district with a family court program is utilizing best practices and is working effectively and efficiently in the disposition of domestic and juvenile cases.  The Administrative Office of the Courts shall report on its efforts in this regard and the results of those efforts to the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety by March 1, 2013.

FOREIGN LANGUAGE INTERPRETERS FOR THE COURTS
SECTION 16.3.(a)  G.S. 7A‑314(f) is repealed.
SECTION 16.3.(b)  G.S. 7A‑343 reads as rewritten:
"§ 7A‑343.  Duties of Director.
The Director is the Administrative Officer of the Courts, and the Director's duties include all of the following:
…
(9c)	Prescribe policies and procedures for the appointment and payment of foreign language interpreters. These policies and procedures shall be applied uniformly throughout the General Court of Justice. After consultation with the Joint Legislative Commission on Governmental Operations, the Director may also convert contractual foreign language interpreter positions to permanent State positions when the Director determines that it is more cost‑effective to do so.
…."
SECTION 16.3.(c)  The Judicial Department may use funds appropriated and funds available to the Department to provide assistance to persons with limited proficiency in English to assist the court in the fair, efficient, and accurate transaction of business and provide more meaningful access to the courts.

EXTEND SUNSET ON PILOT PROJECT FOR ELECTRONIC FILING IN DOMESTIC VIOLENCE AND CIVIL NO‑CONTACT CASES IN ALAMANCE COUNTY
SECTION 16.4.(a)  Section 15.13(b) of S.L. 2010‑31 reads as rewritten:
"SECTION 15.13.(b)  This section expires  June 30, 2014."
SECTION 16.4.(b)  This section becomes effective June 30, 2012.

Expand Uses for Court Information Technology Fund
SECTION 16.5.(a)  G.S. 7A‑343.2 reads as rewritten:
"§ 7A‑343.2.  Court Information Technology and Facilities Fund.
(a)	Fund. – The Court Information Technology and Facilities Fund is established within the Judicial Department as a special revenue fund. Interest and other investment income earned by the Fund accrues to it. The Fund consists of the following revenues:
(1)	All monies collected by the Director pursuant to G.S. 7A‑109(d) and G.S. 7A‑49.5.
(2)	State judicial facilities fees credited to the Fund under G.S. 7A‑304 through G.S. 7A‑307.
(b)	Use. – Money in the Fund derived from State judicial facilities fees must be used to upgrade, maintain, and operate State judicial facilities and the judicial and county courthouse phone systems. All other monies in the Fund must be used to supplement funds otherwise available to the Judicial Department for court information technology and office automation needs.
(c)	Report. – The Director must report by August 1 and February 1 of each year to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety. The report must include the following:
(1)	Amounts credited in the preceding six months to the Fund.
(2)	Amounts expended in the preceding six months from the Fund and the purposes of the expenditures.
(3)	Proposed expenditures of the monies in the Fund."
SECTION 16.5.(b)  G.S. 7A‑304 reads as rewritten:
"§ 7A‑304.  Costs in criminal actions.
(a)	In every criminal case in the superior or district court, wherein the defendant is convicted, or enters a plea of guilty or nolo contendere, or when costs are assessed against the prosecuting witness, the following costs shall be assessed and collected. No costs may be assessed when a case is dismissed. Costs under this section may not be waived unless the judge makes a written finding of just cause to grant such a waiver.
…
(2a)	For the upgrade, maintenance, and operation of State judicial facilities and the judicial and county courthouse phone systems, the sum of  four dollars ($4.00), to be credited to the Court Information Technology and Facilities Fund.
…."
SECTION 16.5.(c)  G.S. 7A‑305 reads as rewritten:
"§ 7A‑305.  Costs in civil actions.
(a)	In every civil action in the superior or district court, except for actions brought under Chapter 50B of the General Statutes, shall be assessed:
…
(1a)	For the upgrade, maintenance, and operation of State judicial facilities and the judicial and county courthouse phone systems, the sum of four dollars ($4.00), to be credited to the Court Information Technology and Facilities Fund.…
(a5)	In every civil action in the superior or district court wherein a party files a pleading containing one or more counterclaims or cross‑claims, except for counterclaim and cross‑claim actions brought under Chapter 50B of the General Statutes for which costs are assessed pursuant to subsection (a1) of this section, the following shall be assessed:
…
(2)	For the upgrade, maintenance, and operation of State judicial facilities and the judicial and county courthouse phone systems, the sum of four dollars ($4.00), to be credited to the Court Information Technology and Facilities Fund.
…."
SECTION 16.5.(d)  G.S. 7A‑306 reads as rewritten:
"§ 7A‑306.  Costs in special proceedings.
(a)	In every special proceeding in the superior court, the following costs shall be assessed:
…
(1a)	For the upgrade, maintenance, and operation of State judicial facilities and the judicial and county courthouse phone systems, the sum of  four dollars ($4.00), to be credited to the Court Information Technology and Facilities Fund.
…."
SECTION 16.5.(e)  G.S. 7A‑307 reads as rewritten:
"§ 7A‑307.  Costs in administration of estates.
(a)	In the administration of the estates of decedents, minors, incompetents, of missing persons, and of trusts under wills and under powers of attorney, in trust proceedings under G.S. 36C‑2‑203, in estate proceedings under G.S. 28A‑2‑4, and in collections of personal property by affidavit, the following costs shall be assessed:
…
(1a)	For the upgrade, maintenance, and operation of State judicial facilities and the judicial and county courthouse phone systems, the sum of four dollars ($4.00), to be credited to the Court Information Technology and Facilities Fund.
…."
SECTION 16.5.(f)  G.S. 7A‑49.5(d) reads as rewritten:
"(d)	Any funds received by the Administrative Office of the Courts from the vendor selected pursuant to subsection (c) of this section, other than applicable statutory court costs, as a result of electronic filing, shall be deposited in the Court Information Technology and Facilities Fund in accordance with G.S. 7A‑343.2."
SECTION 16.5.(g)  G.S. 7A‑109(d) reads as rewritten:
"(d)	In order to facilitate public access to court records, except where public access is prohibited by law, the Director may enter into one or more nonexclusive contracts under reasonable cost recovery terms with third parties to provide remote electronic access to the records by the public. Costs recovered pursuant to this subsection shall be remitted to the State Treasurer to be held in the Court Information Technology and Facilities Fund established in G.S. 7A‑343.2."
SECTION 16.5.(h)  G.S. 7A‑455.1(f) reads as rewritten:
"(f)	Of each appointment fee collected under this section, the sum of fifty‑five dollars ($55.00) shall be credited to the Indigent Persons' Attorney Fee Fund and the sum of five dollars ($5.00) shall be credited to the Court Information Technology and Facilities Fund under G.S. 7A‑343.2. These fees shall not revert."
SECTION 16.5.(i)  This section is effective when it becomes law.

Waiver of Mediation Fees to Require Finding of Just cause
SECTION 16.6.(a)  G.S. 7A‑38.7 reads as rewritten:
"§ 7A‑38.7.  Dispute resolution fee for cases resolved in mediation.
(a)	In each criminal case filed in the General Court of Justice that is resolved through referral to a community mediation center, a dispute resolution fee shall be assessed in the sum of sixty dollars ($60.00) per mediation to support the services provided by the community mediation centers and the Mediation Network of North Carolina. Fees assessed under this section shall be paid to the clerk of superior court in the county where the case was filed and remitted by the clerk to the Mediation Network of North Carolina. The Mediation Network may retain up to three dollars ($3.00) of this amount as an allowance for its administrative expenses. The Mediation Network must remit the remainder of this amount to the community mediation center that mediated the case. The court may waive or reduce a fee assessed under this section only upon entry of a written order, supported by findings of fact and conclusions of law, determining there is just cause to grant the waiver or reduction.
(b)	Before providing the district attorney with a dismissal form, the community mediation center shall require proof that the defendant has paid the dispute resolution fee as required by subsection (a) of this section and shall attach the receipt to the dismissal form."
SECTION 16.6.(b)  G.S. 7A‑304(a) reads as rewritten:
"(a)	In every criminal case in the superior or district court, wherein the defendant is convicted, or enters a plea of guilty or nolo contendere, or when costs are assessed against the prosecuting witness, the following costs shall be assessed and collected. No costs may be assessed when a case is dismissed. Only upon entry of a written order, supported by findings of fact and conclusions of law, determining that there is just cause, the court may (i) waive costs assessed under this section or (ii) waive or reduce costs assessed under subdivisions (7) or (8) of this section.
…
(7)	For the services of the North Carolina State Crime Laboratory facilities, the district or superior court judge shall, upon conviction, order payment of the sum of six hundred dollars ($600.00) to be remitted to the Department of Justice for support of the State Bureau of Investigation. This cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratories have performed DNA analysis of the crime, tests of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. (8)	For the services of any crime laboratory facility operated by a local government or group of local governments, the district or superior court judge shall, upon conviction, order payment of the sum of six hundred dollars ($600.00) to be remitted to the general fund of the local governmental unit that operates the laboratory to be used for law enforcement purposes. The cost shall be assessed only in cases in which, as part of the investigation leading to the defendant's conviction, the laboratory has performed DNA analysis of the crime, test of bodily fluids of the defendant for the presence of alcohol or controlled substances, or analysis of any controlled substance possessed by the defendant or the defendant's agent. The costs shall be assessed only if the court finds that the work performed at the local government's laboratory is the equivalent of the same kind of work performed by the State Bureau of Investigation under subdivision (7) of this subsection. (9)	For the support and services of the State Bureau of Investigation DNA Database and DNA Databank, the sum of two dollars ($2.00). This amount is annually appropriated to the Department of Justice for this purpose. Notwithstanding the provisions of subsection (e) of this section, this cost does not apply to infractions.
…."
SECTION 16.6.(c)  This section becomes effective July 1, 2012, and applies to fees waived on or after that date.

COLLECTION OF WORTHLESS CHECK FUNDS
SECTION 16.7.  Section 15.4 of S.L. 2011‑145 reads as rewritten:
"SECTION 15.4. Notwithstanding the provisions of G.S. 7A‑308(c), the Judicial Department may use any balance remaining in the Collection of Worthless Checks Fund on  June 30, 2012, for the purchase or repair of office or information technology equipment during the  2012‑2013 fiscal year. Prior to using any funds under this section, the Judicial Department shall report to the Joint Legislative Commission on Governmental  Operations, the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety, and the Office of State Budget and Management on the equipment to be purchased or repaired and the reasons for the purchases."

OFFICE OF INDIGENT DEFENSE SERVICES EXPANSION FUNDS
SECTION 16.8.  Section 15.16(a) of S.L. 2011‑145 reads as rewritten:
"SECTION 15.16.(a)  The Judicial Department, Office of Indigent Defense Services, may use up to the sum of two million one hundred fifty thousand dollars ($2,150,000) in appropriated funds during the 2011‑2012 fiscal year for the expansion of existing offices currently providing legal services to the indigent population under the oversight of the Office of Indigent Defense Services, for the creation of new public defender offices within existing  public defender programs, or for the establishment of regional public defender programs. Notwithstanding the defender districts established by G.S. 7A‑498.7, the Office of Indigent Defense Services may use a portion of these funds to create positions within existing public defender programs to handle cases in adjacent counties or districts. These funds may be used to create up to 50 new attorney positions and 25 new support staff positions during the  2011‑2013 biennium and for the salaries, benefits, equipment, and related expenses for these positions in both years of the biennium. Positions creation will be staggered across the two years of the biennium. Prior to using funds for this purpose, the Office of Indigent Defense Services shall report to the Chairs of the House of Representatives and the Senate Appropriations Subcommittees on Justice and Public Safety on the proposed expansion."

OFFICE OF INDIGENT DEFENSE SERVICES/STATE MATCH FOR GRANTS
SECTION 16.9.  Notwithstanding G.S. 143C‑6‑9, the Office of Indigent Defense Services may use the sum of up to fifty thousand dollars ($50,000) from funds available to provide the State matching funds needed to receive grant funds.  Prior to using funds for this purpose, the Office shall report to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety and the Joint Legislative Commission on Governmental Operations on the grants to be matched using these funds.

PART XVii. Office OF THE state auditor

Exempt Occupational Licensing Boards From Paying For Audits Under Certain Circumstances
SECTION 17.1.  G.S. 93B‑4 reads as rewritten:
"§ 93B‑4.  Audit of Occupational Licensing Boards; payment of costs.
(a)	The State Auditor shall audit occupational licensing boards from time to time to ensure their proper operation. The books, records, and operations of each occupational licensing board shall be subject to the oversight of the State Auditor pursuant to Article 5A of Chapter 147 of the General Statutes. In accordance with G.S. 147‑64.7(b), the State Auditor may contract with independent professionals to meet the requirements of this section.
(b)	Each occupational licensing board with a budget of at least fifty thousand dollars ($50,000) shall conduct an annual financial audit of its operations and provide a copy to the State Auditor."

Special Responsibility CONSTITUENT Institutions – Audit
SECTION 17.2.  G.S. 116‑30.8 reads as rewritten:
"§ 116‑30.8.  Special responsibility constituent institutions: annual audit by State Auditor or certified public accountant.
Each special responsibility constituent institution shall be audited annually. The Chancellor of the special responsibility constituent institution may use State funds to contract with the State Auditor or with a certified public accountant to perform the audit. The contract for audit services may be for up to three years in duration. The audit shall be provided to the Chancellor and Board of Trustees of the special responsibility institution, the Board of Governors of The University of North Carolina, and the State Auditor. The audit shall also be included in the State's Comprehensive Annual Financial Report (CAFR).
The Board of Governors of The University of North Carolina shall ensure that all special responsibility constituent institutions are audited in accordance with this section."

Auditor Publish Cost of Audits
SECTION 17.3.  Article 5A of Chapter 147 of the General Statutes is amended by adding a new section to read:
"§ 147‑64.6C.  Cost of audit report published.
Each audit report shall itemize the number of staff hours used in conducting the audit and in preparation of the audit report and the total cost of conducting the audit and preparing the audit report."

PART XVIII. Department of Cultural Resources

Roanoke Island Commission Reporting Requirement
SECTION 18.1.  G.S. 143B‑131.4 reads as rewritten:
"§ 143B‑131.4.  Commission reports.
Before July 1, 1995, the Commission shall submit to the General Assembly a comprehensive report incorporating specific recommendations of the Commission for development and promotion of the Elizabeth II State Historic Site and Visitor Center. After the initial report, the Commission shall submit a quarterly report to the Chairs of the House Appropriations Subcommittee on General Government and the Chairs of the Senate Appropriations Committee on General Government and Information Technology and to the Fiscal Research Division of the General Assembly. The report shall include:
(1)	A summary of actions taken by the Commission consistent with the powers and duties of the Commission set forth in G.S. 143B‑131.2.
(2)	Recommendations for legislation and administrative action to promote and develop the Elizabeth II State Historic Site and Visitor Center.
(3)	An accounting of funds received and expended."

Modify State Historic Sites Special Fund to Include State History Museums
SECTION 18.2.  G.S. 121‑7.7 reads as rewritten:
"§ 121‑7.7.  State Historic Sites and Museums special fund.
(a)	Fund. – The State Historic Sites and Museums Fund is created as a special, interest‑bearing revenue fund in the Division of State Historic Sites and the Division of State History Museums. The Fund consists of all receipts derived from the lease or rental of property or facilities, disposition of structures or products of the land, private donations, and admissions and fees collected at the State Historic Sites, State History Museums, and Maritime Museums. The revenues in the Fund may be used only for the operation, interpretation, maintenance, preservation, development, and expansion of the individual State Historic Site, State History Museum, and Maritime Museum where the receipts are generated. The respective Division and the staff from each State Historic Site, State History Museum, and Maritime Museum will determine how the funds will be used at that Historic Site, State History Museum, and Maritime Museum.
(b)	Application. – This section applies to the individual State Historic Sites and State History and Maritime Museums owned by or under the control of the Division of State Historic Sites and the Division of State History Museums, with the exception of the Bentonville Battlefield State Historic Site and the North Carolina Transportation Museum. The Bentonville Battlefield State Historic Site is subject to G.S. 121‑7.5. The North Carolina Transportation Museum is subject to G.S. 121‑7.6.
(c)	Reports. – The Department of Cultural Resources must submit to the Joint Legislative Commission on Governmental Operations, the House of Representatives and Senate Appropriations Subcommittees on General Government, and the Fiscal Research Division by September 30 of each year a report on the Fund that includes the source and amounts of all funds credited to the Fund and the purpose and amount of all expenditures from the Fund during the prior fiscal year."

PART XIX. General Assembly

Program Evaluation Division to Study the Duties and Services of the North Carolina Human Relations Commission and the Civil Rights Division of the Office of Administrative Hearings
SECTION 19.1.  Section 20.2 of S.L. 2011‑145, as amended by Section 45(b) of S.L. 2011‑391, reads as rewritten:
"SECTION 20.2.(a)  The Program Evaluation Division shall study the duties and services of the North Carolina Human Relations Commission and the Civil Rights Division of the Office of Administrative Hearings to determine whether there is unnecessary overlap and duplication of services and recommend the placement of the Commission and Division in the appropriate agency or agencies.
"SECTION 20.2.(b)  The Program Evaluation Division shall report its findings upon the convening of the 2013 General Assembly.
"SECTION 20.2.(c)  This section is effective when it becomes law."

PART XX. Department of Insurance

DOI to Study Fire Protection Grant Fund
SECTION 20.1.(a)  The Department of Insurance shall study how the fund distribution method for the State Fire Protection Grant Fund could more fully meet the requirement of G.S. 58‑85A‑1(b) that the distribution method be equitable and uniform. The study shall consider the following factors, as well as any other factors the Department finds relevant:
(1)	Whether the basis for determining the amount of compensation due a local fire district or political subdivision for providing local fire protection to State‑owned buildings and their contents actually reflects the cost to the local fire district or political subdivision of providing the fire protection services.
(2)	How the division in funds among properties supported by the General Fund, properties supported by the Highway Fund, and properties supported by The University of North Carolina receipts required by G.S. 58‑85A‑1(c) should be revised to support fire protection services provided to State‑owned properties not receiving support from those Funds or receipts.
SECTION 20.1.(b)  The Department shall report its findings and any recommendations for revision of the fund distribution method to the House and Senate Appropriations Subcommittees on General Government and to the Fiscal Research Division on or before October 1, 2012.

Increase Consumer Protection Fund Retained Amount
SECTION 20.2.  G.S. 58‑2‑215 reads as rewritten:
"§ 58‑2‑215.  Consumer Protection Fund.
…
(c)	Moneys appropriated by the General Assembly shall be deposited in the Fund and shall become a part of the continuation budget of the Department of Insurance. Such continuation budget amount shall equal the actual expenditures drawn from the Fund during the prior fiscal year plus the official inflation rate designated by the Director of the Budget in the preparation of the State Budget for each ensuing fiscal year; provided that if interest income on the Fund exceeds the amount yielded by the application of the official inflation rate, such continuation budget amount shall be the actual expenditures drawn from the Fund. In the event the amount in the Fund exceeds five hundred thousand dollars ($500,000) at the end of any fiscal year, such excess shall revert to the General Fund.
…."

Funding of Building Code Reviews for State Buildings
SECTION 20.3.  Section 7 of Session Law 2009‑474 reads as rewritten:
"SECTION 7. The Department of Insurance shall transfer to the Department of Administration four building code review positions selected by the Department of Administration for the purpose of assisting the Department of Administration in administering G.S. 143‑341(3) and G.S. 143‑139(e). These positions shall be supported by the Insurance Regulatory Fund at one hundred percent (100%) of the full budgeted amount for each position."

DOI to Assess volunteer safety workers compensation fund
SECTION 20.4.  The Department of Insurance, from funds available to it, shall contract with an independent actuary to assess the Volunteer Safety Workers Compensation Fund. The assessment shall include the following components:
(1)	Recommendations as to the level of funding required to ensure that the Fund can meet its financial obligations.
(2)	The level and duration of funding required for the Fund to become self‑sufficient in the future.
(3)	The nature of the claims paid by the Fund and any claims‑related trends that impact the health of the Fund.
(4)	Recommendations as to the appropriate level of premiums to be paid by members or their departments.
(5)	A projection of revenues to the Fund from sources other than State funding.
(6)	A comparison of the projected timing and risk of the cash flow from investments with the cash flow needed to pay claims.
No later than October 1, 2012, the Department shall report the independent actuary's assessment and findings and also provide a comparison of the premiums paid into the Fund and premiums paid by municipal fire departments for their employees' workers compensation insurance to the Chairs of the House of Representatives and Senate Appropriations Committees, the Chairs of the House of Representatives and Senate Appropriations Subcommittees on General Government, and the Fiscal Research Division.

PART XXI. DEPARTMENT OF THE secretary of state

Treat Fees Collected by Charitable Licensing Division Like Other Fees Collected by the Secretary of State
SECTION 21.1.  Fees collected under Chapter 131F of the General Statutes shall be deposited into the General Fund.

PART XXIi. Office of State Budget and Management

NC Symphony Funding
SECTION 22.1.  Section 25.2 of S.L. 2011‑145 reads as rewritten:
"SECTION 25.2.(a)  Of the funds appropriated in this act to the Office of State Budget and Management‑Special Appropriations, the sum of two million dollars ($2,000,000) in nonrecurring funds for the 2012‑2013 fiscal year shall be allocated to the North Carolina Symphony in accordance with this section.
"SECTION 25.2.(b)  It is the intent of the General Assembly that the NC Symphony achieve its goal of raising the sum of nine million dollars ($9,000,000) in non‑State funding to support the operations of the Symphony. To that end, upon demonstrating to the Office of State Budget and Management that the NC Symphony has reached fund‑raising targets in the amounts set forth in this subsection, the NC Symphony shall receive allocations from the Office of State Budget and Management as follows:
(1)	Upon raising the initial sum of four million dollars ($4,000,000) in non‑State funding, the NC Symphony shall receive the sum of five hundred thousand dollars ($500,000).
(2)	Upon raising an additional sum of two million dollars ($2,000,000) in non‑State funding for a total amount of six million dollars ($6,000,000) in non‑State funds, the NC Symphony shall receive the sum of five hundred thousand dollars ($500,000).
(3)	Upon raising an additional sum of two million dollars ($2,000,000) in non‑State funding for a total sum of eight million dollars ($8,000,000) in non‑State funds, the NC Symphony shall receive the sum of five hundred thousand dollars ($500,000).
(4)	Upon raising an additional sum of one million dollars ($1,000,000) in non‑State funding, for a total sum of nine million dollars ($9,000,000) in non‑State funds, the NC Symphony shall receive the final sum of five hundred thousand dollars ($500,000) for the 2012‑2013 fiscal year.
"SECTION 25.2.(c)  Funds allocated pursuant to this section are in addition to any other funds allocated to the NC Symphony in this act."

PART XXiii. STATE BOARD OF ELECTIONS

HAVA Funds/Disability Access
SECTION 23.1.(a)  The State Board of Elections shall not expend any Help America Vote Funds (HAVA) Title II Funds for the 2011‑2012 fiscal year and, unless prohibited by federal law, shall retain those funds until Maintenance of Effort funds are appropriated, except that voting accessibility funds granted by the Secretary of Health and Human Services under Section 261 of HAVA may be applied for and expended by the State Board of Elections to improve voting accessibility for the disabled.
SECTION 23.1.(b)  This section is effective when it becomes law.

HAVA FUNDS/STATE SUPPORT OF COUNTY BDS OF ELECTIONS
SECTION 23.2.(a)  Effective July 1, 2013, G.S. 163‑82.28 reads as rewritten:
"§ 163‑82.28.  The HAVA Election Fund.
There is established a special fund to be known as the Election Fund. All funds received for implementation of the Help America Vote Act of 2002, Public Law 107‑252, shall be deposited in that fund. The State Board of Elections shall use funds in the Election Fund only to implement HAVA. No HAVA funds may be granted to or used by counties for the operation of elections or for expenses which by this Chapter are borne by the counties, except that HAVA funds may be used for local infrastructure of SEIMS (State Elections Information Management System), which is necessary for the State to administer the elections. The State Board of Elections shall annually report to the House and Senate Committees on Appropriations, to the Fiscal Research Division, and to the Joint Legislative Commission on Governmental Operations on implementation of this section."
SECTION 23.2.(b)  Effective July 1, 2013, Article 4 of Chapter 163 of the General Statutes is amended by adding a new section to read:
"§ 163‑37.1.  No State funds for county election expenses.
No State funds shall be appropriated to counties, or allocated to them by the State Board of Elections, for expenses of the county boards of elections, except that State funds may be used for local infrastructure of SEIMS (State Elections Information Management System), which is necessary for the State to administer the elections. The State Board of Elections shall annually report to the House and Senate Committees on Appropriations, to the Fiscal Research Division, and to the Joint Legislative Commission on Governmental Operations on implementation of this section."

PART XXIV. Department of Transportation

Cash Flow Highway Fund and Highway Trust Fund Appropriations
SECTION 24.1.(a)  Section 28.1 of S.L. 2011‑145 is repealed.
SECTION 24.1.(b)  For planning and programming purposes, the Department of Transportation shall assume a maximum gas tax rate of thirty‑five cents (35¢) a gallon for fiscal years 2013‑2014 through 2016‑2017.
SECTION 24.1.(c)  The General Assembly authorizes and certifies anticipated revenues for the Highway Fund as follows:
For Fiscal Year 2013‑2014	$ 1,945.0 million
For Fiscal Year 2014‑2015	$ 1,974.1 million
For Fiscal Year 2015‑2016	$ 2,005.5 million
For Fiscal Year 2016‑2017	$ 2,027.5 million
SECTION 24.1.(d)  The General Assembly authorizes and certifies anticipated revenues for the Highway Trust Fund as follows:
For Fiscal Year 2013‑2014	$ 1,047.6 million
For Fiscal Year 2014‑2015	$ 1,092.9 million
For Fiscal Year 2015‑2016	$ 1,150.1 million
For Fiscal Year 2016‑2017	$ 1,171.5 million

Further Privatization of Pre‑Construction Activities
SECTION 24.2.  For fiscal year 2013‑2014, the Department of Transportation shall increase the outsourcing of preliminary engineering projects from fifty percent (50%) of the total funds in the annual work plan, as required by Section 28.9.(3) of S.L. 2011‑145, to sixty percent (60%) of the total funds in the annual work plan.

Funds from Inspection Program Account for Other Highway Fund Uses
SECTION 24.3.  Notwithstanding G.S. 20‑183.7(d), the sum of ten million dollars ($10,000,000) from the Inspection Program Account within the Highway Fund, as established under G.S. 20‑183.7(d), is appropriated and allocated as shown in this act.

Repeal Automatic Aviation Division Budget Adjustment
SECTION 24.4.  G.S. 136‑16.4 is repealed.

Reenact Statutory Allocation to the L.U.S.T. Fund from the Excess Proceeds of the Motor Fuel Inspection Tax and Transfer Funds to the Noncommercial L.U.S.T. Fund
SECTION 24.5.(a)  G.S. 119‑18(b) reads as rewritten:
"(b)	Proceeds. – The proceeds of the inspection tax levied by this section shall be applied first to the costs of administering this Article and Subchapter V of Chapter 105 of the General Statutes. The remainder of the proceeds shall be credited on a monthly basis as follows:
(1)	From the remainder of the proceeds, a credit shall be made to the Highway Fund to be used for system preservation under the Department of Transportation in the highway maintenance program. The amount of the monthly credit under this subdivision shall be calculated so as to provide a total of up to one million eight hundred six thousand four hundred forty‑six dollars ($1,806,446) per year to the Highway Fund.
(2)	After crediting funds under subdivision (1) of this subsection, any proceeds remaining shall be credited to the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund and the Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund, to be distributed as follows:
a.	If the amount of revenue in the Noncommercial Fund at the end of a month is at least five million dollars ($5,000,000), one‑half of the remainder of the proceeds shall be credited to the Noncommercial Fund, and one‑half of the remainder of the proceeds shall be credited to the Commercial Fund.
b.	If the amount of revenue in the Noncommercial Fund at the end of a month is less than the threshold amount in subdivision (1) of this subsection, all of the remainder of the proceeds shall be credited to the Noncommercial Fund."
SECTION 24.5.(b)  Notwithstanding any other provision of law to the contrary, the sum of two million one hundred seventy‑one thousand eight hundred ninety‑eight dollars ($2,171,898) from the Highway Fund shall be transferred to the Noncommercial L.U.S.T. Fund (Fund Code 64305, Budget Code 6371).

Clarify Use of Credit Reserve Balance in Highway Fund
SECTION 24.6.  G.S. 136‑44.2 reads as rewritten:
"§ 136‑44.2.  Budget and appropriations.
(a)	The Director of the Budget shall include in the "Current Operations Appropriations Act" an enumeration of the purposes or objects of the proposed expenditures for each of the construction and maintenance programs for that budget period for the State primary, secondary, State parks road systems, and other transportation systems. The State primary system shall include all portions of the State highway system located both inside and outside municipal corporate limits that are designated by N.C., U.S. or Interstate numbers. The State secondary system shall include all of the State highway system located both inside and outside municipal corporate limits that is not a part of the State primary system. The State parks system shall include all State parks roads and parking lots that are not also part of the State highway system. The transportation systems shall include State‑maintained, nonhighway modes of transportation as well.
(b)	All construction and maintenance programs for which appropriations are requested shall be enumerated separately in the budget. Programs that are entirely State funded shall be listed separately from those programs involving the use of federal‑aid funds. Proposed appropriations of State matching funds for each of the federal‑aid construction programs shall be enumerated separately as well as the federal‑aid funds anticipated for each program in order that the total construction requirements for each program may be provided for in the budget. Also, proposed State matching funds for the highway planning and research program shall be included separately along with the anticipated federal‑aid funds for that purpose.
(c)	Other program categories for which appropriations are requested, such as, but not limited to, maintenance, channelization and traffic control, bridge maintenance, public service and access road construction, transportation projects and systems, and ferry operations shall be enumerated in the budget.
(d)	The Department of Transportation shall have all powers necessary to comply fully with provisions of present and future federal‑aid acts. For purposes of this section, "federally eligible construction project" means any construction project except secondary road projects developed pursuant to G.S. 136‑44.7 and 136‑44.8 eligible for federal funds under any federal‑aid act, whether or not federal funds are actually available.
(e)	The "Current Operations Appropriations Act" shall also contain the proposed appropriations of State funds for use in each county for maintenance and construction of secondary roads, to be allocated in accordance with G.S. 136‑44.5 and 136‑44.6. State funds appropriated for secondary roads shall not be transferred nor used except for the construction and maintenance of secondary roads in the county for which they are allocated pursuant to G.S. 136‑44.5 and 136‑44.6.
(f)	If the unreserved credit balance in the Highway Fund on the last day of a fiscal year is greater than the amount estimated for that date in the Current Operations Appropriations Act for the following fiscal year, the excess shall be used in accordance with this subsection. The Director of the Budget shall allocate the excess to a reserve (i) for access and public roads or (ii) for other urgent needs. The use of this reserve shall be subject to the following:
(1)	Restrictions on use. – No more than two million dollars ($2,000,000) from this reserve may be spent on a single project. Funds from this reserve being used for an "other urgent need" project cannot be used for administrative costs, information technology costs, or economic development.
(2)	Approval. – The Department of Transportation shall submit for approval to the Director of the Budget all expenditures from the reserve established under this subsection.
(3)	Reporting. – At least five days, not including State holidays or weekend days, prior to submitting an expenditure request to the Director of the Budget under subdivision (2) of this subsection, the Department of Transportation shall submit a report on the expenditure request to the Fiscal Research Division and to the members of the House Appropriations Subcommittee on Transportation and the Senate Appropriations Committee on Department of Transportation. Such report shall be certified by the chief financial officer of the Department of Transportation and shall contain (i) a project description, (ii) whether the project is for access and public roads or for other urgent needs, (iii) justification of the project, (iv) the total project cost, (v) the amount of funding for the project coming from the reserve, and (vi) other funding sources for the project.
(4)	Carryforward. – If on the last day of the fiscal year the balance in the reserve established by this subsection is greater than five million dollars ($5,000,000), then the Director of the Budget shall transfer the amount in excess of that sum to the Reserve for General Maintenance in the Highway Fund.
(g)	The Department of Transportation may provide for costs incurred or accrued for traffic control measures to be taken by the Department at major events which involve a high degree of traffic concentration on State highways, and which cannot be funded from regular budgeted items. This authorization applies only to events which are expected to generate 30,000 vehicles or more per day. The Department of Transportation shall provide for this funding by allocating and reserving up to one hundred thousand dollars ($100,000) before any other allocations from the appropriations for State maintenance for primary, secondary, and urban road systems are made, based upon the same proportion as is appropriated to each system."

Transfer Unexpended Mid‑Currituck Gap Funds Back to Highway Trust Fund
SECTION 24.7.  Any funds appropriated to the North Carolina Turnpike Authority under G.S. 136‑176(b2) to cover debt service or related financing costs for the Mid‑Currituck Bridge project and that remain unencumbered at the end of fiscal year 2011‑2012 are hereby transferred back to the Highway Trust Fund to be appropriated and allocated as shown in this act.

Codify Mobility Fund Formula Developed by Department of Transportation
SECTION 24.8.(a)  G.S. 136‑188 reads as rewritten:
"§ 136‑188.  Use of North Carolina Mobility Fund.
(a)	The Department of Transportation shall use the Mobility Fund to fund transportation projects, selected by the Department, of statewide and regional significance that relieve congestion and enhance mobility across all modes of transportation.
(b)	Notwithstanding subsections (c) and (d) of this section, the initial project funded from the Mobility Fund shall be the widening and improvement of Interstate 85 north of the Yadkin River Bridge.
(c)	To be eligible for funding from the Mobility Fund, a project must meet the following requirements:
(1)	The project must be on statewide or Regional tier facilities.
(2)	The project must be ready to have funds obligated for construction within five years.
(3)	The project must be (i) consistent with MPO/RPO transportation planning efforts, (ii) included in an adopted transportation plan, and (iii) found to be consistent with local land‑use plans, where available. As used in this subdivision, "MPO" means metropolitan planning organization and "RPO" means rural planning organization.
(4)	The project must be in a conforming transportation plan if the project is in a non‑attainment or maintenance area.
(5)	Only the project's capital costs, including right‑of‑way acquisition and construction, may be funded. Maintenance, operation, and planning costs may not be funded from the Mobility Fund.
(6)	There is no minimum project capital cost as a threshold for funding a project.
(d)	Eligible projects shall be scored and ranked, with the highest scored projects receiving funding priority. Ranking scores shall be determined according to the following formula:
(1)	Mobility benefit‑cost. – Eighty percent (80%) of the ranking score shall be the estimated travel time savings in vehicle hours that the project will provide over 30 years divided by the cost of the project to the Mobility Fund.
(2)	Multimodal/intermodal. – Twenty percent (20%) of the ranking score shall be based on whether the project provides an improvement to more than one mode of transportation and what types of other modes of transportation are involved in the project. Using a scale from zero to 100, the Department of Transportation shall provide for the assignment of points under this subdivision. The Department's determination of a point system under this subdivision shall not be subject to rulemaking under Chapter 150B of the General Statutes."
SECTION 24.8.(b)  Section 28.33(c) of S.L. 2011‑145 is repealed.

Civil Penalties to Be Treated as Receipts for Transfer to Civil Penalty and Forfeiture Fund
SECTION 24.9.  The clear proceeds of all civil penalties, civil forfeitures, and civil fines collected by the Department of Transportation for transfer to the Civil Penalty and Forfeiture Fund and which are currently recorded as revenue in the Highway Fund (Budget Code 84210) shall be eliminated from the Estimated Revenue for the Highway Fund. The corresponding Highway Fund appropriation in Fund 150889 shall also be eliminated.
Rather than recording the proceeds as revenue, the clear proceeds of all civil penalties, civil forfeitures, and civil fines collected by the Department of Transportation for transfer to the Civil Penalty and Forfeiture Fund shall be recorded as receipts and budgeted in a totally receipt‑supported fund center (150889) in the Highway Fund (Budget Code 84210) for transfer to the Civil Penalty and Forfeiture Fund.

Positions in Support of the Combined Motor Vehicle Registration and Property Tax Collection System
SECTION 24.10.(a)  Upon request from the Department of Transportation and notwithstanding any other provision of law to the contrary, the Office of State Budget and Management may authorize the creation of time‑limited, full‑time equivalent positions within the Department of Transportation and its Division of Motor Vehicles in excess of the positions authorized by this act for the sole purposes of implementing and administering the combined motor vehicle registration and property tax collection system, in accordance with the funding authorizations in G.S. 105‑330.5 and G.S. 105‑330.10. Positions created under this authorization shall terminate no later than June 30, 2014. Following the approval of a request, the Office of State Budget and Management shall direct the transfer of funds from the Combined Motor Vehicle and Registration Account, also known as the Division of Motor Vehicles Taxation Interest Fund for Integrated Computer System, to support personnel and related operating costs for the positions approved under this section.
SECTION 24.10.(b)  Beginning October 1, 2012, the Office of State Budget and Management shall report quarterly on all transfers of funds from the Combined Motor Vehicle and Registration Account (Combined Account) and positions supported by the Combined Account during the 2012‑2013 fiscal year to the House Appropriations Subcommittee on Transportation, the Senate Appropriations Committee on Department of Transportation, the Joint Legislative Transportation Oversight Committee, and the Fiscal Research Division. The report shall include, at a minimum, the following:
(1)	A summary of activities funded by the Combined Account to date.
(2)	Amounts transferred from the Combined Account and expended per activity.
(3)	A detailed listing of positions funded by receipts to the Combined Account, identifying the position number, title, effective date and duration, cost, functions performed, and organizational unit to which the position is assigned.
SECTION 24.10.(c)  No later than May 1, 2013, the Department of Revenue and the Department of Transportation shall jointly report on the status of the Memorandum of Understanding required by G.S. 105‑330.11 to the Joint Legislative Transportation Oversight Committee and Joint Legislative Oversight Committee on Information Technology. The report shall identify the estimated recurring costs of system administration and proposed administrative fees to support the costs of combined notice generation and collection of registration fees and vehicle property taxes.

PART XXV. Salaries and Benefits

CERTAIN EXECUTIVE BRANCH OFFICIALS
SECTION 25.1.(a)  Section 29.3 of S.L. 2011‑145 reads as rewritten:
"SECTION 29.3. Effective for the 2012‑2013 fiscal year, the annual salaries, payable monthly, for the following executive branch officials shall remain unchanged as follows:
Executive Branch Officials	Annual Salary
	Chairman, Alcoholic Beverage Control Commission	$109,553
	State Controller	153,319
	Commissioner of Motor Vehicles	109,553
	Commissioner of Banks	123,198
		
	Chair, Board of Review, Division of Employment Security	120,805
	Members, Board of Review, Division of Employment Security	119,305
	State Personnel Director	120,363
	Chairman, Parole Commission	100,035
	Full‑time members of the Parole Commission	92,356
	Part‑time members of the Parole Commission	46,178
	Chairman, Utilities Commission	137,203
	Members of the Utilities Commission	123,198
		
	Director, Museum of Art	112,256
	Executive Director, North Carolina
Agricultural Finance Authority	106,635
	State Chief Information Officer	153,227."
SECTION 25.1.(b)  Effective July 1, 2012, G.S. 143B‑721 reads as rewritten:
"§ 143B‑721.  Post‑Release Supervision and Parole Commission – members; selection; removal; chairman; compensation; quorum; services.
Effective August 1, 2005, the Post‑Release Supervision and Parole Commission shall consist of one full‑time member and two half‑time members. The three members shall be appointed by the Governor from persons whose recognized ability, training, experience, and character qualify them for service on the Commission. The terms of office of any members serving on the Commission on June 30, 2005, shall expire on that date.
Effective July 1, 2012, (i) an additional full‑time member shall be appointed by the Governor, (ii) the half‑time member who was first appointed to the Commission in 2005 and reappointed February 13, 2011, shall begin serving as a full‑time member of the Commission, and the Post‑Release Supervision and Parole Commission shall consist of three full‑time members and one half‑time member. The additional full‑time member appointed July 1, 2012, shall serve a term expiring February 28, 2013, and a successor shall be appointed as provided in this section. The half‑time member who begins serving as a full‑time member effective July 1, 2012, shall serve a term expiring June 30, 2013, and a successor shall be appointed as provided in this section.
Effective February 28, 2013, the term of the half‑time member who was appointed to the Commission on November 2, 2009, shall expire; a full‑time member of the Commission shall be appointed by the Governor to begin serving March 1, 2013; and the Post‑Release Supervision and Parole Commission shall consist of four full‑time members. The full‑time member appointed March 1, 2013, shall serve a term expiring February 28, 2017, and a successor shall be appointed as provided in this section.The term of the member serving as chair of the Commission on July 1, 2012, shall expire on June 30, 2013, and a successor shall be appointed as provided in this section.
All members of the Commission shall be appointed by the Governor from persons whose recognized ability, training, experience, and character qualify them for service on the Commission.
 Except as otherwise provided in this section, the terms of office of persons appointed by the Governor as members of the Commission shall be for four years or until their successors are appointed and qualify. Any appointment to fill a vacancy on the Commission created by the resignation, removal, death or disability of a member shall be for the balance of the unexpired term only.
The Governor shall have the authority to remove any member of the Commission from office for misfeasance, malfeasance or nonfeasance, pursuant to the provisions of G.S. 143B‑13. The Governor shall designate a member of the Commission to serve as chair of the Commission at the pleasure of the Governor.
The granting, denying, revoking, or rescinding of parole, the authorization of work‑release privileges to a prisoner, or any other matters of business coming before the Commission for consideration and action shall be decided by majority vote of the full Commission.
The members of the Commission shall receive the salary fixed by the General Assembly in the Current Operations Appropriations Act and shall receive necessary travel and subsistence expenses in accordance with the provisions of G.S. 138‑6. Notwithstanding any other provision of law, the half‑time members of the Commission shall not be subject to the provisions of G.S. 135‑3(8)(c).
All clerical and other services required by the Commission shall be supplied by the Secretary of Public Safety."

SALARY ADJUSTMENTS FOR SPECIAL CIRCUMSTANCES ONLY/NO AUTOMATIC INCREASES
SECTION 25.2.(a)  Section 29.8 of S.L. 2011‑145, as amended by Section 59A of S.L. 2011‑391, reads as rewritten:
"SECTION 29.8.(a)  The annual pay of all State employees for the 2011‑2013 fiscal biennium shall remain unchanged from that authorized on June 30, 2011, or the last date in pay status during the 2010‑2011 fiscal year, if earlier, except that an increase may be allowed during fiscal year 2011‑2012 under the following special circumstances:
(1)	For all State employees regardless of funding source, and for employees of the North Carolina Community College System and local school boards who are paid from State funds, salaries may be increased for reallocations or promotions, in‑range adjustments for job change, career progression adjustments for demonstrated competencies, or any other adjustment related to an increase in job duties or responsibilities, none of which are subject to the salary freeze otherwise provided by this Part. All other salary increases are prohibited.
(1a)	For employees of the North Carolina Community College System, notwithstanding subdivision (1) of this subsection, salaries may be increased if the increase is funded from local funding sources.
(2)	For The University of North Carolina, (i) faculty using funds from the Faculty Recruiting and Retention Fund, the Distinguished Professors Endowment Fund, or the University Cancer Research Fund in the case of faculty involved in cancer research supported by that fund and (ii) faculty, nonfaculty, and other employee adjustments, including retention adjustments, funded from non‑State funding sources.
(3)	For employees of the judicial branch, for local supplementation as authorized by G.S. 7A‑300.1.
The cumulative salary adjustment allowed under this subsection for the 2011‑2012 fiscal year may exceed ten percent (10%) of annual salary only if the adjustment is approved in advance by the Office of State Budget and Management, The University of North Carolina Board of Governors, the Board of the North Carolina Community College System, the Legislative Services Commission, the local board of education, or other authorized body as appropriate.
"SECTION 29.8.(a1)  The annual pay of all State employees for the 2012‑2013 fiscal year shall remain unchanged from that authorized on June 30, 2012, or the last date in pay status during the 2011‑2012 fiscal year, if earlier, except that an increase may be allowed during fiscal year 2012‑2013 under the following special circumstances:
(1)	For all State employees, regardless of funding source, and for employees of the North Carolina Community College System and local school boards who are paid from State funds, salaries may be increased as specifically authorized by personnel policy established on or before April 30, 2012, for (i) reallocations; (ii) promotions; (iii) in‑range adjustments for job change, equity, or labor market; (iv) career progression adjustments, or (v) any other adjustment authorized under that personnel policy.
(2)	For The University of North Carolina, (i) EPA faculty using funds from the Faculty Recruiting and Retention Fund, the Distinguished Professors Endowment Fund, or the University Cancer Research Fund in the case of faculty involved in cancer research supported by that fund, (ii) EPA faculty any adjustment specifically authorized under Board of Governors policy established on or before April 30, 2012, (iii) EPA nonfaculty any adjustment funded from non‑State funding sources and specifically authorized under Board of Governors policy established on or before April 30, 2012, and (iv) SPA employees only as provided under subdivision (1) of this subsection.
(3)	For employees of the judicial branch, for local supplementation as authorized by G.S. 7A‑300.1 or as otherwise authorized under personnel policy established on or before April 30, 2012, excepting automatic step increases for assistant and deputy clerks of court and magistrates that are suspended under subsection (b) of this section.
The cumulative salary adjustment allowed under this subsection for the 2012‑2013 fiscal year may exceed ten percent (10%) of annual salary only if the adjustment is approved in advance by the Office of State Budget and Management, The University of North Carolina Board of Governors, the Board of the North Carolina Community College System, the Legislative Services Commission, the local board of education, or other authorized body as appropriate.
"SECTION 29.8.(b)  The automatic salary step increases for assistant and deputy clerks of superior court and magistrates are suspended for the 2011‑2013 fiscal biennium.
"SECTION 29.8.(c)  The salary increase provisions of G.S. 20‑187.3 are suspended for the 2011‑2013 fiscal biennium.
"SECTION 29.8.(d)  Notwithstanding G.S. 53‑96.1, and except as provided by subdivision (1) of subsection (a1) of this section, employees of the Office of the Commissioner of Banks shall not be awarded compensation increases or bonuses during the 2011‑2013 fiscal biennium.
"SECTION 29.8.(e)  Employees of the Lottery Commission shall not receive compensation bonuses during the 2011‑2013 fiscal biennium.
"SECTION 29.8.(f)  No employee of any other State agency or constituent institution of The University of North Carolina, excluding employees of the University of North Carolina Health Care System and employees participating in a constituent institution's medical faculty practice plan, shall receive compensation bonuses."
SECTION 25.2.(b)  The provisions of Section 25.4 of this act apply to persons for whom bonuses or compensation bonuses are prohibited by Sections 29.8.(d) through (f) of S.L. 2011‑145.

UNIVERSITY FACULTY RECRUITING AND RETENTION FUND
SECTION 25.3.  The Faculty Recruiting and Retention Fund under the Office of the President of The University of North Carolina is reestablished for the 2012‑2013 fiscal year. Allocations from the fund shall be made for salary increases at the discretion of the President of The University of North Carolina only for the purpose of recruiting and retaining faculty members as necessary at constituent institutions. This section is subject to the provisions of Section 29.8.(a1) of S.L. 2011‑145 as added by this act.

COMPENSATION BONUS for fiscal year 2012‑2013
SECTION 25.4.(a)  Except as provided by subsection (b) of this section, any person (i) whose salary is set pursuant to the State Personnel Act, State law, or under this Part, (ii) who was employed in a State‑funded position on April 30, 2012, and (iii) who is employed in a State‑funded position on October 1, 2012, shall be awarded a one‑time, lump‑sum compensation bonus for the 2012‑2013 fiscal year in the amount of two hundred fifty dollars ($250.00). The compensation bonus shall be adjusted pro rata for permanent part‑time employees.
SECTION 25.4.(b)  The following persons shall not be eligible for the compensation bonus authorized by this section:
(1)	Any person whose salary is set under Section 29.1, Section 29.2, Section 29.3, or Section 29.4(a) of S.L. 2011‑145.
(2)	Any member of the General Assembly whose salary is set under Section 29.5(1) of S.L. 2011‑145.
(3)	Any person whose salary is set under Section 29.4(b)(2) of S.L. 2011‑145.
SECTION 25.4.(c)  The compensation bonus shall be awarded in accordance with subsection (b) of this section to eligible employees without regard to an employee's placement within the salary range, including employees at the top of the salary range. The compensation bonus shall not be administered under G.S. 126‑7.
SECTION 25.4.(d)  The  compensation bonus provided by this section is compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.
SECTION 25.4.(e)  The compensation bonuses provided by this section shall be paid in the employee's first payroll of October 2012, and are not awarded to any person who separated from State service due to termination, resignation, dismissal, reduction in force, death, or retirement prior to that date.
The Director of the Budget shall transfer all funds necessary for the compensation bonus provided by this section, including funds for the employer's retirement and social security contributions. Salaries and related benefits for positions that are funded partially from the General Fund or Highway Fund and partially from sources other than the General Fund or Highway Fund shall be increased from the General Fund or Highway Fund appropriation only to the extent of the proportionate part of the compensation bonus paid from the General Fund or Highway Fund. 
The Director of the Budget may allocate out of special operating funds or from other sources of the employing agency, except tax revenues, sufficient funds to allow the compensation bonus in accordance with subsection (b) of this section, including funds for the employer's retirement and social security contributions, for the permanent full‑time and part‑time employees of the agency, provided the employing agency elects to make available the necessary funds.

SPECIAL ANNUAL LEAVE BONUS
SECTION 25.5. Any person (i) who was on April 30, 2012, a full‑time permanent employee of the State, a community college institution, or a local board of education, (ii) was either still employed in such status on July 1, 2012, or is under contract for the 2012‑2013 school year, and (iii) who is eligible to earn annual leave, shall have a one‑time additional five days of annual leave credited on July 1, 2012. The additional leave shall be accounted for either separately or together with the leave provided by Section 28.3A of S.L. 2002‑126, by Section 30.12B(a) of S.L. 2003‑284, and by Section 29.14A of S.L. 2005‑276, and shall remain available until used, notwithstanding any other limitation on the total number of days of annual leave that may be carried forward. Part‑time permanent employees shall receive a pro rata amount of the five days.

TEACHER SALARY SCHEDULES
SECTION 25.6.(a)  The following monthly salary schedules shall apply for the 2012‑2013 fiscal year to certified personnel of the public schools who are classified as teachers.  The schedules contain 36 steps, with each step corresponding to one year of teaching experience. Public school employees paid according to this salary schedule and receiving NBPTS certification or obtaining a master's degree shall not be prohibited from receiving the appropriate increase in salary. Provided, however, teachers employed during the 2011‑2012 school year who did not work the required number of months to acquire an additional year of experience shall not receive a decrease in salary as otherwise would be required by the salary schedule below.

2012‑2013 Monthly Salary Schedule
"A" Teachers
	Years of Experience	"A" Teachers	NBPTS Certification
	0	$3,043	N/A	
	1	$3,043	N/A	
	2	$3,043	N/A
	3	$3,043	$3,408
	4	$3,043	$3,408
	5	$3,085	$3,455
	6	$3,129	$3,504
	7	$3,264	$3,656
	8	$3,404	$3,812
	9	$3,538	$3,963
	10	$3,667	$4,107
	11	$3,771	$4,224
	12	$3,819	$4,277
	13	$3,868	$4,332
	14	$3,918	$4,388
	15	$3,967	$4,443
	16	$4,018	$4,500
	17	$4,069	$4,557
	18	$4,122	$4,617
	19	$4,176	$4,677
	20	$4,231	$4,739
	21	$4,286	$4,800
	22	$4,345	$4,866
	23	$4,403	$4,931
	24	$4,461	$4,996
	25	$4,523	$5,066
	26	$4,584	$5,134
	27	$4,650	$5,208
	28	$4,714	$5,280
	29	$4,779	$5,352
	30	$4,845	$5,426
	31	$4,913	$5,503
	32	$4,984	$5,582
	33	$5,055	$5,662
	34	$5,153	$5,771
	35+	$5,255	$5,886

2012‑2013 Monthly Salary Schedule
"M" Teachers
	Years of Experience	"M" Teachers	NBPTS Certification
	0	$3,347	N/A
	1	$3,347	N/A
	2	$3,347	N/A
	3	$3,347	$3,749
	4	$3,347	$3,749
	5	$3,394	$3,801
	6	$3,442	$3,855
	7	$3,590	$4,021
	8	$3,744	$4,193
	9	$3,892	$4,359
	10	$4,034	$4,518
	11	$4,148	$4,646
	12	$4,201	$4,705
	13	$4,255	$4,766
	14	$4,310	$4,827
	15	$4,364	$4,888
	16	$4,420	$4,950
	17	$4,476	$5,013
	18	$4,534	$5,078
	19	$4,594	$5,145
	20	$4,654	$5,212
	21	$4,715	$5,281
	22	$4,780	$5,354
	23	$4,843	$5,424
	24	$4,907	$5,496
	25	$4,975	$5,572
	26	$5,042	$5,647
	27	$5,115	$5,729
	28	$5,185	$5,807
	29	$5,257	$5,888
	30	$5,330	$5,970
	31	$5,404	$6,052
	32	$5,482	$6,140
	33	$5,561	$6,228
	34	$5,668	$6,348
	35+	$5,781	$6,475
SECTION 25.6.(b)  Section 29.12(d) of S.L. 2011‑145 reads as rewritten:
"SECTION 29.12.(d)  The first step of the salary schedule for school psychologists shall be equivalent to Step 9, corresponding to nine years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "M" teachers. Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience. Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.
Certified psychologists with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided for certified psychologists. Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for certified psychologists."

SCHOOL‑BASED ADMINISTRATOR SALARY SCHEDULE
SECTION 25.7.(a)  The following base salary schedule for school‑based administrators shall apply only to principals and assistant principals.  This base salary schedule shall apply for the 2012‑2013 fiscal year, commencing July 1, 2012. Provided, however, school‑based administrators (i) employed during the 2011‑2012 school year who did not work the required number of months to acquire an additional year of experience and (ii) employed during the 2012‑2013 school year in the same classification shall not receive a decrease in salary as otherwise would be required by the salary schedule below.

2012‑2013 Principal and Assistant Principal Salary Schedules
Classification
Years of Exp	Assistant	Prin I	Prin II	Prin III	Prin IV
	Principal	(0‑10)	(11‑21)	(22‑32)	(33‑43)
	0‑8	$3,781	‑	‑	‑	‑
	9	$3,931	‑	‑	‑	‑
	10	$4,074	‑	‑	‑	‑
	11	$4,189	‑	‑	‑	‑
	12	$4,243	$4,243	‑	‑	‑
	13	$4,298	$4,298	‑	‑	‑
	14	$4,353	$4,353	$4,408	‑	‑
	15	$4,408	$4,408	$4,464	‑	‑
	16	$4,464	$4,464	$4,521	$4,579	‑
	17	$4,521	$4,521	$4,579	$4,640	$4,701
	18	$4,579	$4,579	$4,640	$4,701	$4,762
	19	$4,640	$4,640	$4,701	$4,762	$4,828
	20	$4,701	$4,701	$4,762	$4,828	$4,891
	21	$4,762	$4,762	$4,828	$4,891	$4,956
	22	$4,828	$4,828	$4,891	$4,956	$5,025
	23	$4,891	$4,891	$4,956	$5,025	$5,092
	24	$4,956	$4,956	$5,025	$5,092	$5,166
	25	$5,025	$5,025	$5,092	$5,166	$5,237
	26	$5,092	$5,092	$5,166	$5,237	$5,310
	27	$5,166	$5,166	$5,237	$5,310	$5,383
	28	$5,237	$5,237	$5,310	$5,383	$5,458
	29	$5,310	$5,310	$5,383	$5,458	$5,537
	30	$5,383	$5,383	$5,458	$5,537	$5,617
	31	$5,458	$5,458	$5,537	$5,617	$5,725
	32	$5,537	$5,537	$5,617	$5,725	$5,839
	33	$5,617	$5,617	$5,725	$5,839	$5,956
	34	$5,725	$5,725	$5,839	$5,956	$6,075
	35	$5,839	$5,839	$5,956	$6,075	$6,197
	36	‑	$5,956	$6,075	$6,197	$6,321
	37	‑	‑	$6,197	$6,321	$6,447
	38	‑	‑	$6,321	$6,447	$6,576
	39	‑	‑	‑	$6,576	$6,708
	40	‑	‑	‑	$6,708	$6,842
	41	‑	‑	‑	‑	$6,979

2012‑2013 Principal and Assistant Principal Salary Schedules
Classification
Years of Exp	Prin V	Prin VI	Prin VII	Prin VIII
	(44‑54)	(55‑65)	(66‑100)	(101+)
	0‑18	$4,828	‑	‑	‑
	19	$4,891	‑	‑	‑
	20	$4,956	$5,025	‑	‑
	21	$5,025	$5,092	$5,237	‑
	22	$5,092	$5,166	$5,310	$5,383
	23	$5,166	$5,237	$5,383	$5,458
	24	$5,237	$5,310	$5,458	$5,537
	25	$5,310	$5,383	$5,537	$5,617
	26	$5,383	$5,458	$5,617	$5,725
	27	$5,458	$5,537	$5,725	$5,839
	28	$5,537	$5,617	$5,839	$5,956
	29	$5,617	$5,725	$5,956	$6,075
	30	$5,725	$5,839	$6,075	$6,197
	31	$5,839	$5,956	$6,197	$6,321
	32	$5,956	$6,075	$6,321	$6,447
	33	$6,075	$6,197	$6,447	$6,576
	34	$6,197	$6,321	$6,576	$6,708
	35	$6,321	$6,447	$6,708	$6,842
	36	$6,447	$6,576	$6,842	$6,979
	37	$6,576	$6,708	$6,979	$7,119
	38	$6,708	$6,842	$7,119	$7,261
	39	$6,842	$6,979	$7,261	$7,406
	40	$6,979	$7,119	$7,406	$7,554
	41	$7,119	$7,261	$7,554	$7,705
	42	$7,261	$7,406	$7,705	$7,859
	43	‑	$7,554	$7,859	$8,016
	44	‑	$7,705	$8,016	$8,176
	45	‑	‑	$8,176	$8,340

SECTION 25.7.(b)  G.S. 29.13(h) of S.L. 2011‑145 reads as rewritten:
"SECTION 29.13.(h)  During the 2011‑2012 fiscal year and the 2012‑2013 fiscal year, the placement on the salary schedule of an administrator with a one‑year provisional assistant principal's certificate shall be at the entry‑level salary for an assistant principal or the appropriate step on the teacher salary schedule, whichever is higher."

SALARY STUDY OF SBI LAW ENFORCEMENT PERSONNEL
SECTION 25.8.(a)  The Office of State Personnel shall conduct a study of the salary structure and promotion polices for law enforcement officer positions in the State Bureau of Investigation division of the Department of Justice.
SECTION 25.8.(b)  In conducting the study required by this section, the Office of State Personnel shall examine the salary structures and promotion policies for law enforcement officers in: (i) other State and local law enforcement agencies in this State; and (ii) law enforcement agencies in other states.
SECTION 25.8.(c)  No later than January 1, 2013, the Office of State Personnel shall report its findings to the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety and to the Chairs of the Joint Legislative Oversight Committee on Justice and Public Safety.

OFFICE OF STATE PERSONNEL TO PERFORM CLASSIFICATION STUDIES OF CERTAIN POSITIONS
SECTION 25.9.  The Office of State Personnel shall conduct classification studies, including labor market analyses, of Nursing Branch positions statewide and of the Health Care Technician and Correctional Health Assistant occupational groups. If appropriate, the Office of State Personnel shall recommend to the State Personnel Commission a Salary Range Revision or establishment of a Special Minimum Rate, as those terms are defined in the State Personnel Manual to ensure that current employees are compensated appropriately relative to market rates for similar positions and to enhance the State's ability to recruit and retain qualified employees in these occupational classes. The Office of State Personnel shall report its findings, any actions of the State Personnel Commission, and any related salary increases or adjustments granted or recommended based upon these studies to the Appropriations Committees of the House and Senate no later than two weeks after the convening of the 2013 legislative session.

SALARY‑RELATED CONTRIBUTIONS
SECTION 25.10.  Section 29.22(d) of S.L. 2011‑145 reads as rewritten:
"SECTION 29.22.(d)  Effective July 1, 2012, the State's employer contribution rates budgeted for retirement and related benefits as percentage of covered salaries for the 2012‑2013 fiscal year are:  (i)   thirteen and fifty‑nine hundredths percent (13.59%) – Teachers and State Employees; (ii)  eighteen and fifty‑nine hundredths percent (18.59%) – State Law Enforcement Officers; (iii)  twelve and fifty‑eight hundredths percent (12.58%) – University Employees' Optional Retirement System; (iv)  twelve and fifty‑eight hundredths percent (12.58%) – Community College Optional Retirement Program; (v)  thirty‑one and seventy hundredths percent (31.70%) – Consolidated Judicial Retirement System; and (vi) five and thirty hundredths percent (5.30%) – Legislative Retirement System. Each of the foregoing contribution rates includes five and thirty hundredths percent (5.30%) for hospital and medical benefits. The rate for Teachers and State Employees, State Law Enforcement Officers, Community College Optional Retirement Program, and for the University Employees' Optional Retirement Program includes  forty‑four hundredths percent (0.44%) for the Disability Income Plan. The rates for Teachers and State Employees and State Law Enforcement Officers include sixteen hundredths percent (0.16%) for the Death Benefits Plan. The rate for State Law Enforcement Officers includes five percent (5%) for Supplemental Retirement Income."

OPTIONAL RETIREMENT SYSTEM/forfeiture funds
SECTION 25.11.(a)  On or before August 1, 2012, The University of North Carolina General Administration shall forward from its General Fund appropriations, or other available funds, to the Teachers' and State Employees' Retirement System a lump sum amount equal to any unpaid funds owed pursuant to G.S. 135‑5.1(b)(5) for the 2011 calendar year, notwithstanding any legal interpretation to the contrary as to whether such forfeited funds could be disbursed directly from a Section 401(a) plan.
SECTION 25.11.(b)  G.S. 135‑5.1(b)(5) reads as rewritten:
"(5)	If any participant in the Optional Retirement Program having less than five years of total membership service under any combination of the Teachers' and State Employees' Retirement System, the Local Governmental Employees' Retirement System, the Consolidated Judicial Retirement System, or the Optional Retirement Program leaves the employ of The University of North Carolina and either retires or commences employment with an employer not having a retirement program with the same  company, regardless of how the participant's account is held, that   participant's entire interest in the Optional Retirement Program attributable to contributions of The University of North Carolina shall be forfeited and shall either (i) be refunded to The University of North Carolina and  held by The University of North Carolina, with an equivalent lump sum amount then forwarded to the Retirement System no later than three months after the end of the calendar year in which the forfeiture occurs and credited to the pension accumulation fund or (ii) be paid directly to the Retirement System and credited to the pension accumulation fund, at the election of The University of North Carolina."

PART XXVI. Capital Appropriations

Capital Appropriations/General Fund
SECTION 26.1.  There is appropriated from the General Fund for the 2012‑2013 fiscal year the following amounts for capital improvements:

Capital Improvements – General Fund	2012‑2013

Department of Environment and Natural Resources
	Water Resources Development Projects	$ 8,722,000

Department of Justice
	Western Regional Crime Lab	3,000,000

Department of Public Safety
	Highway Patrol Training Academy – Site Work, Armory, & Cadet
		Dormitory	13,300,000

TOTAL CAPITAL IMPROVEMENTS – GENERAL FUND	$ 25,022,000

Water Resources Development Projects
SECTION 26.2.(a)  The Department of Environment and Natural Resources shall use the following funds for water resources development projects, in accordance with the schedule that follows: (i) the funds appropriated in this act for water resources development projects and (ii) funds carried forward from previous fiscal years and designated to be used for water resources development projects. These funds will provide a State match for an estimated eighty‑seven million eight hundred ninety‑eight thousand dollars ($87,898,000) in federal funds.

Name of Project	2012‑2013

(1)	B. Everett Jordan Lake Water Supply Storage	$200,000
(2)	Wilmington Harbor Maintenance	1,200,000
(3)	Morehead City Harbor Maintenance	–
(4)	Wilmington Harbor Deepening	6,000,000
(5)	2012 Corps Long Term MOA for Dredging	1,675,000
(6)	Water Resources Planning in support of Session Law 2010‑143	100,000
(7)	Carolina Beach Renourishment Project	1,184,000
(8)	Wilmington Harbor Improvements Feasibility	500,000
(9)	John H. Kerr Dam and Reservoir Sec. 216	200,000
(10)	Planning Assistance to Communities	50,000
(11)	Aquatic Plant Control, Statewide and Lake Gaston	200,000
(12)	Bogue Banks Coastal Storm Damage Reduction Study	112,000
(13)	West Onslow Beach Storm Damage Reduction (Topsail Beach) – PED	33,000
(14)	Surf City/NTB Coastal Storm Damage Reduction Study – PED	37,000
(15)	Neuse River Basin – PED		150,000
(16)	Currituck Sound Environmental Restoration Study	358,000
(17)	Concord Streams, NC, Sect 206	500,000
(18)	State‑Local Projects			1,500,000
(19)	Emerald Isle/Pine Knolls Shore Renourishment Project	2,000,000
(20)	North Topsail Beach Renourishment Project	1,250,000

TOTALS	$ 17,249,000

SECTION 26.2.(b) It is the intent of the General Assembly that funds carried forward from previous fiscal years be used to supplement the eight million seven hundred twenty‑two  thousand dollars ($8,722,000) appropriated for water resources development projects in Section 26.1 of this act. Therefore, the following funds carried forward from previous fiscal years shall be used for the following projects:

Name of Project	Amount Carried Forward

(1)	B. Everett Jordan Lake Water Supply Storage	$200,000
(2)	Wilmington Harbor Maintenance	1,200,000
(3)	2012 Corps MOA for Shallow Draft Inlet Dredging	1,675,000
(4)	Wilmington Harbor Deepening	3,000,000
(5)	Water Resources Planning in support of S.L. 2010‑143	100,000
(6)	Wilmington Harbor Improvements Feasibility	250,000
(7)	Planning Assistance to Communities	40,000
(8)	Aquatic Plant Control, Statewide and Lake Gaston	100,000
(9)	Bogue Banks Coastal Storm Damage Reduction Study	50,000
(10)	West Onslow Beach Storm Damage Reduction (Topsail Beach) – PED	25,000
(11)	Surf City/NTB Coastal Storm Damage Reduction Study – PED	37,000
(12)	Neuse River Basin – PED		50,000
(13)	Currituck Sound Environmental Restoration Study	300,000
(14)	Concord Streams, NC, Sect 206	500,000
(15)	State‑Local Projects			1,000,000

TOTALS	$ 8,527,000

SECTION 26.2.(c)  Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed. If any projects funded under subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 2012‑2013 fiscal year, or if the projects funded under subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:
(1)	U.S. Army Corps of Engineers project feasibility studies.
(2)	U.S. Army Corps of Engineers projects whose schedules have advanced and require State‑matching funds in fiscal year 2012‑2013.
(3)	State‑local water resources development projects.
However, fund availability shall not be used to fund the North Carolina International Terminal or any studies related thereto. Funds subject to this subsection that are not expended or encumbered for the purposes set forth in subdivisions (1) through (3) of this subsection shall revert to the General Fund at the end of the 2013‑2014 fiscal year.
SECTION 26.2.(d)  The Department shall make semiannual reports on the use of these funds to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division of the General Assembly, and the Office of State Budget and Management. Each report shall include all of the following:
(1)	All projects listed in this section.
(2)	The estimated cost of each project.
(3)	The date that work on each project began or is expected to begin.
(4)	The date that work on each project was completed or is expected to be completed.
(5)	The actual cost of each project.
The semiannual reports also shall show those projects advanced in schedule, those projects delayed in schedule, and an estimate of the amount of funds expected to revert to the General Fund.
SECTION 26.2.(e)  Notwithstanding any provision of law to the contrary, funds appropriated for a water resources development project shall be used to provide no more than fifty percent (50%) of the nonfederal portion of funds for the project. This subsection applies to funds appropriated in this act and to funds appropriated prior to the 2011‑2013 fiscal biennium that are unencumbered and proposed for reallocation to provide the nonfederal portion of funds for water resources development projects. The limitation on fund usage contained in this subsection applies only to projects in which a local government or local governments participate.
SECTION 26.2.(f)  The 2012 Long Term Dredging Memorandum of Agreement with the U.S. Army Corps of Engineers authorized by this section shall provide for all of the following:
(1)	Prioritization of projects through joint consultation with the State, applicable units of local government, and the U.S. Army Corps of Engineers. 
(2)	Adherence to the requirements of subsection (e) of this section.
(3)	Annual reporting by the Department on the use of funds provided to the U.S. Army Corps of Engineers under the 2012 Long Term Dredging Memorandum of Agreement. These reports shall be made to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division of the General Assembly, and the Office of State Budget and Management and shall include all of the following:
a.	A list of all projects commenced.
b.	The estimated cost of each project.
c.	The date that work on each project commenced or is expected to commence.
d.	The date that work on each project was completed or is expected to be completed.
e.	The actual cost of each project.

Prohibit Expenditures of state funds for the North Carolina International Terminal
SECTION 26.3.  Notwithstanding G.S. 136‑253 and any other provision of law, State funds, as that term is defined in G.S. 143C‑1‑1, shall not be used to fund the North Carolina International Terminal of the North Carolina State Ports Authority.

Repairs and Renovations Reserve Allocation
SECTION 26.4.(a)  Of the funds in the Reserve for Repairs and Renovations for the 2012‑2013 fiscal year, the following allocations shall be made to the following agencies for repairs and renovations pursuant to G.S. 143C‑4‑3:
(1)	Forty‑six percent (46%) shall be allocated to the Board of Governors of The University of North Carolina.
(2)	Fifty‑four percent (54%) shall be allocated to the Office of State Budget and Management.
The Office of State Budget and Management shall consult with the Joint Legislative Commission on Governmental Operations prior to the allocation or reallocation of these funds. The Board of Governors shall report to the Joint Legislative Commission on Governmental Operations in accordance with G.S. 143C‑4‑3(d).
SECTION 26.4.(b)  Notwithstanding G.S. 143C‑4‑3(d), of the funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, a portion shall be used by the Board of Governors for the installation of fire sprinklers in university residence halls. This portion shall be in addition to funds otherwise appropriated in this act for the same purpose. Such funds shall be allocated among the university's constituent institutions by the President of The University of North Carolina, who shall consider the following factors when allocating those funds:
(1)	The safety and well‑being of the residents of campus housing programs.
(2)	The current level of housing rents charged to students and how that compares to an institution's public peers and other UNC institutions.
(3)	The level of previous authorizations to constituent institutions for the construction or renovation of residence halls funded from the General Fund, or from bonds or certificates of participation supported by the General Fund, since 1996.
(4)	The financial status of each constituent institution's housing system, including debt capacity, debt coverage ratios, credit rankings, required reserves, the planned use of cash balances for other housing system improvements, and the constituent institution's ability to pay for the installation of fire sprinklers in all residence halls.
(5)	The total cost of each proposed project, including the cost of installing fire sprinklers and the cost of other construction, such as asbestos removal and additional water supply needs.
The Board of Governors shall submit progress reports to the Joint Legislative Commission on Governmental Operations. Reports shall include the status of completed, current, and planned projects. Reports also shall include information on the financial status of each constituent institution's housing system, the constituent institution's ability to pay for fire protection in residence halls, and the timing of installation of fire sprinklers. Reports shall be submitted on January 1 and July 1 until all residence halls have fire sprinklers.
SECTION 26.4.(c)  Notwithstanding G.S. 143C‑4‑3(d), of the funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, a portion shall be used by the Board of Governors for campus public safety improvements allowable under G.S. 143C‑4‑3(b).

Reporting on Capital Projects
SECTION 26.5.(a)  Definitions. – The following definitions apply in this section:
(1)	Capital project. – Any capital improvement, as that term is defined in G.S. 143C‑1‑1, that is not complete by the effective date of this section and that is funded in whole or in part with either State funds or statutorily or constitutionally authorized indebtedness of any kind.
(2)	Construction phase. – The status of a particular capital project as described using the terms customarily employed in the design and construction industries.
(3)	New capital project. – A capital project that is authorized in this act or subsequent to the effective date of this act.
SECTION 26.5.(b)  Reporting. – The following reports are required:
(1)	By October 1, 2012, and every six months thereafter, each State agency shall report on the status of agency capital projects to the Joint Legislative Commission on Governmental Operations and to the Joint Legislative Oversight Committee on Capital Improvements.
(2)	By October 1, 2012, and quarterly thereafter, each State agency shall report on the status of agency capital projects to the Fiscal Research Division of the General Assembly and to the Office of State Budget and Management.
SECTION 26.5.(c)  The reports required by this section shall include at least the following information about every agency capital project:
(1)	The current construction phase of the project.
(2)	The anticipated time line from the current construction phase to project completion.
(3)	Information about expenditures that have been made in connection with the project, regardless of source of the funds expended.
(4)	Information about the adequacy of funding to complete the project, including estimates of how final expenditures will relate to initial estimates of expenditures, and whether or not scope reductions will be necessary in order to complete  the project within its budget.
(5)	For new capital projects only, an estimate of the operating costs for the project for the first five fiscal years of its operation.

UNCW Social and Behavioral Sciences Building
SECTION 26.6.  Section 29.13(a) of S.L. 2007‑323, as amended by Section 27.8(d) of S.L. 2008‑107 and Section 2(b) of S.L. 2009‑209, reads as rewritten:
"SECTION 29.13.(a)  The State, with the prior approval of the State Treasurer and the Council of State, as provided in Article 9 of Chapter 142 of the General Statutes, is authorized to issue or incur special indebtedness in order to provide funds to the State to be used, together with other available funds, to pay the capital facility costs of the projects described in this subsection. In accordance with G.S. 142‑83, this subsection authorizes the issuance or incurrence of special indebtedness:
…
(9)	In the maximum aggregate principal amount of thirty‑two million eight hundred ninety‑nine thousand six hundred ninety‑nine dollars ($32,899,699) to finance the capital facility costs of completing a new teaching laboratory at the University of North Carolina at Wilmington and of renovating the Social and Behavioral Science Building at the University of North Carolina at Wilmington. No more than a maximum aggregate amount of two million five hundred thousand dollars ($2,500,000) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2008. No more than a maximum aggregate amount of eight million six hundred thirty‑one thousand two hundred fifty dollars ($8,631,250) of special indebtedness may be issued or incurred under this subdivision prior to July 1, 2009.
…."

Transfer for Plant Conservation Program
SECTION 26.9.  From funds deposited with the State Treasurer in a capital improvement account to the credit of the Department of Agriculture and Consumer Services pursuant to G.S. 146‑30, the sum of thirty thousand dollars ($30,000) for the 2012‑2013 fiscal year shall be transferred to the Department of Agriculture and Consumer Services to be used, notwithstanding G.S. 146‑30, by the Department for its plant conservation program under Article 19B of Chapter 106 of the General Statutes for costs incidental to the acquisition of land, such as land appraisals, land surveys, title searches, and environmental studies, and for the management of the plant conservation program preserves owned by the Department.

PART XXvii. Miscellaneous Provisions

state budget act applies
SECTION 27.1.  The provisions of the State Budget Act, Chapter 143C of the General Statutes, are reenacted and shall remain in full force and effect and are incorporated in this act by reference.

Committee Report
SECTION 27.2.(a)  The N.C. House of Representatives Appropriations Committee Report on the Continuation, Expansion and Capital Budgets dated May 29, 2012, which was distributed in the House of Representatives and used to explain this act, shall indicate action by the General Assembly on this act and shall, therefore, be used to construe this act, as provided in the State Budget Act, Chapter 143C of the General Statutes, as appropriate, and for these purposes shall be considered a part of this act and, as such, shall be printed as a part of the Session Laws.
SECTION 27.2.(b)  The budget enacted by the General Assembly is for the maintenance of the various departments, institutions, and other spending agencies of the State for the 2012‑2013 budget as provided in G.S. 143C‑3‑5. This budget includes the appropriations of State funds as defined in G.S. 143C‑1‑1(d)(25).
The Director of the Budget submitted recommended adjustments to the budget to the General Assembly in May 2012 in the document "Investing in Our Future/Recommended Adjustments 2012‑2013 North Carolina State Budget" for the 2012‑2013 fiscal year for the various departments, institutions, and other spending agencies of the State. The adjustments to these documents made by the General Assembly are set out in the Committee Report.
SECTION 27.2.(c)  The budget enacted by the General Assembly shall also be interpreted in accordance with G.S. 143C‑5‑5, the special provisions in this act, and other appropriate legislation.
In the event that there is a conflict between the line‑item budget certified by the Director of the Budget and the budget enacted by the General Assembly, the budget enacted by the General Assembly shall prevail.

Report by Fiscal Research Division on changes to 2012‑2013 budget/publication
SECTION 27.3.(a)  The Fiscal Research Division of the Legislative Services Commission shall issue a report on budget actions taken by the 2011 Regular Session of the General Assembly in 2012. The report shall be in the form of a revision of the Committee Report adopted for House Bill 950 pursuant to G.S. 143C‑5‑5, and shall include all modifications made to the 2012‑2013 budget prior to sine die adjournment of the 2011 Regular Session.
SECTION 27.3.(b)  The report issued pursuant to this section, and the Committee Report issued pursuant to G.S. 143C‑5‑5, shall be construed together with this act in determining the intent of the General Assembly.
SECTION 27.3.(c)  The Director of the Fiscal Research Division of the Legislative Services Commission shall send a copy of the report issued pursuant to this section to the Director of the Budget. The report shall be published on the General Assembly's Internet Web site for public access.

MOST TEXT APPLIES ONLY TO THE 2012‑2013 FISCAL YEAR
SECTION 27.4.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2012‑2013 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2012‑2013 fiscal year.

EFFECT OF HEADINGS
SECTION 27.5.  The headings to the parts and sections of this act are a convenience to the reader and are for reference only. The headings do not expand, limit, or define the text of this act, except for effective dates referring to a part.

APPROPRIATIONS LIMITATIONS AND DIRECTIONS APPLY
SECTION 27.6.(a)  Except where expressly repealed or amended by this act, the provisions of S.L. 2011‑145, S.L. 2011‑315, S.L. 2011‑373, S.L. 2011‑391, S.L. 2011‑419, and S.L. 2012‑2 remain in effect.
SECTION 27.6.(b)  Notwithstanding any modifications by this act in the amounts appropriated, except where expressly repealed or amended, the limitations and directions for the 2012‑2013 fiscal year in S.L. 2011‑145, S.L. 2011‑315, S.L. 2011‑373, S.L. 2011‑391, S.L. 2011‑419, and S.L. 2012‑2 that applied to appropriations to particular agencies or for particular purposes apply to the newly enacted appropriations and budget reductions of this act for those same particular purposes.

Severability
SECTION 27.7.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

Effective Date
SECTION 27.8.  Except as otherwise provided, this act becomes effective July 1, 2012.